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Should Value Investors Buy Central Puerto (CEPU) Stock?

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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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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.

Central Puerto (CEPU - Free Report) is a stock many investors are watching right now. CEPU is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 10.33, while its industry has an average P/E of 17.33. Over the past 52 weeks, CEPU's Forward P/E has been as high as 55.15 and as low as 3.79, with a median of 11.27.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by 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. CEPU has a P/S ratio of 1.91. This compares to its industry's average P/S of 2.04.

Finally, our model also underscores that CEPU has a P/CF ratio of 4.90. 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. CEPU's P/CF compares to its industry's average P/CF of 7.16. Over the past year, CEPU's P/CF has been as high as 5.95 and as low as 2.49, with a median of 3.89.

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


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