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Are Investors Undervaluing Cosan (CZZ) 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.

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.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One company to watch right now is Cosan . CZZ is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 13.04 right now. For comparison, its industry sports an average P/E of 17.42. Over the past year, CZZ's Forward P/E has been as high as 19.16 and as low as 9.64, with a median of 13.90.

CZZ is also sporting a PEG ratio of 0.80. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. CZZ's PEG compares to its industry's average PEG of 1.07. Within the past year, CZZ's PEG has been as high as 0.84 and as low as 0.76, with a median of 0.80.

Another valuation metric that we should highlight is CZZ's P/B ratio of 0.99. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. CZZ's current P/B looks attractive when compared to its industry's average P/B of 1.58. Over the past year, CZZ's P/B has been as high as 1.03 and as low as 0.43, with a median of 0.70.

Finally, investors should note that CZZ has a P/CF ratio of 4.31. 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. This stock's P/CF looks attractive against its industry's average P/CF of 14.65. CZZ's P/CF has been as high as 4.49 and as low as 2.43, with a median of 3.32, all within the past year.

These are only a few of the key metrics included in Cosan'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, CZZ looks like an impressive value stock at the moment.

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