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Is Compania Cervecerias Unidas (CCU) Stock Undervalued Right Now?
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One company value investors might notice is Compania Cervecerias Unidas (CCU - Free Report) . CCU is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 16.68 right now. For comparison, its industry sports an average P/E of 20.71. Over the past year, CCU's Forward P/E has been as high as 17.47 and as low as 10.22, with a median of 12.91.
CCU is also sporting a PEG ratio of 0.81. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. CCU's PEG compares to its industry's average PEG of 2.22. Over the last 12 months, CCU's PEG has been as high as 1.12 and as low as 0.66, with a median of 0.82.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. CCU has a P/S ratio of 0.86. This compares to its industry's average P/S of 1.75.
Finally, our model also underscores that CCU has a P/CF ratio of 16.72. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. CCU's P/CF compares to its industry's average P/CF of 60.22. CCU's P/CF has been as high as 16.72 and as low as 8.45, with a median of 11.16, all within the past year.
These are only a few of the key metrics included in Compania Cervecerias Unidas's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, CCU looks like an impressive value stock at the moment.