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Are Investors Undervaluing Cosan (CZZ) 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.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One company to watch right now is Cosan . CZZ is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 13.52 right now. For comparison, its industry sports an average P/E of 17. Over the past 52 weeks, CZZ's Forward P/E has been as high as 19.16 and as low as 10.55, with a median of 13.90.

Investors should also note that CZZ holds a PEG ratio of 0.83. 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. CZZ's industry has an average PEG of 1.04 right now. Within the past year, CZZ's PEG has been as high as 0.84 and as low as 0.76, with a median of 0.81.

Investors should also recognize that CZZ has a P/B ratio of 1.03. The P/B is a method of comparing a stock's market value to 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 1.56. CZZ's P/B has been as high as 1.03 and as low as 0.44, with a median of 0.72, over the past year.

Finally, we should also recognize that CZZ has a P/CF ratio of 3.86. 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 company's current P/CF looks solid when compared to its industry's average P/CF of 14.46. Within the past 12 months, CZZ's P/CF has been as high as 4.01 and as low as 2.43, with a median of 3.33.

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

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