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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.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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 #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 11.56. This compares to its industry's average Forward P/E of 21.01. Over the past year, UGP's Forward P/E has been as high as 12.93 and as low as 6.92, with a median of 10.05.

Another notable valuation metric for UGP is its P/B ratio of 1.34. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 2.82. Over the past 12 months, UGP's P/B has been as high as 1.61 and as low as 0.97, with a median of 1.19.

Finally, investors should note that UGP has a P/CF ratio of 5.03. 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 company's current P/CF looks solid when compared to its industry's average P/CF of 13.43. Over the past 52 weeks, UGP's P/CF has been as high as 5.45 and as low as 3.46, with a median of 4.37.

These are only a few of the key metrics included in Ultrapar Participacoes's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, UGP looks like an impressive value stock at the moment.

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