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Are Investors Undervaluing Ultrapar Participacoes (UGP) 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.

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 Ultrapar Participacoes (UGP - Free Report) . UGP is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A.

UGP is also sporting a PEG ratio of 3.77. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. UGP's industry currently sports an average PEG of 3.89. Within the past year, UGP's PEG has been as high as 5.36 and as low as 0.54, with a median of 3.96.

Finally, investors will want to recognize that UGP has a P/CF ratio of 6.76. 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 9.20. Over the past 52 weeks, UGP's P/CF has been as high as 8.24 and as low as 4.93, with a median of 6.63.

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

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