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Are Investors Undervaluing Compania Cervecerias Unidas (CCU) Right Now?

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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

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.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

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 a P/E ratio of 11.21, which compares to its industry's average of 18.54. Over the past year, CCU's Forward P/E has been as high as 16.74 and as low as 6.90, with a median of 11.77.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. CCU has a P/S ratio of 0.68. This compares to its industry's average P/S of 1.74.

Finally, investors should note that CCU has a P/CF ratio of 18.17. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. CCU's current P/CF looks attractive when compared to its industry's average P/CF of 50.16. CCU's P/CF has been as high as 25.78 and as low as 16.48, with a median of 21.59, all within the past year.

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


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