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Is Compania Cervecerias Unidas (CCU) Stock Undervalued Right Now?

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The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find 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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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.

Compania Cervecerias Unidas (CCU - Free Report) is a stock many investors are watching right now. CCU is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 11.26. This compares to its industry's average Forward P/E of 19.63. Over the last 12 months, CCU's Forward P/E has been as high as 17.47 and as low as 10.22, with a median of 12.66.

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 0.94. This compares to its industry's average P/S of 1.91.

Finally, investors should note that CCU has a P/CF ratio of 24.03. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 53.97. Within the past 12 months, CCU's P/CF has been as high as 25.78 and as low as 8.45, with a median of 12.98.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Compania Cervecerias Unidas is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, CCU feels like a great value stock at the moment.


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