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Are Investors Undervaluing Embotelladora Andina (AKO.B) Right Now?

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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.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One company to watch right now is Embotelladora Andina (AKO.B - Free Report) . AKO.B is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 10.54, which compares to its industry's average of 22.27. Over the last 12 months, AKO.B's Forward P/E has been as high as 10.54 and as low as 7.84, with a median of 9.10.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. AKO.B has a P/S ratio of 0.8. This compares to its industry's average P/S of 1.89.

Finally, investors should note that AKO.B has a P/CF ratio of 14.60. 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. AKO.B's current P/CF looks attractive when compared to its industry's average P/CF of 27.33. Over the past year, AKO.B's P/CF has been as high as 16.08 and as low as 7.28, with a median of 9.97.

Value investors will likely look at more than just these metrics, but the above data helps show that Embotelladora Andina is likely undervalued currently. And when considering the strength of its earnings outlook, AKO.B sticks out at as one of the market's strongest value stocks.


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