While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
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 Paranaense de Energia (ELP - Free Report) . ELP is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock is trading with P/E ratio of 11.62 right now. For comparison, its industry sports an average P/E of 15.22. Over the last 12 months, ELP's Forward P/E has been as high as 14.21 and as low as 5.94, with a median of 9.11.
Investors should also recognize that ELP has a P/B ratio of 0.82. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 1.75. ELP's P/B has been as high as 1.10 and as low as 0.51, with a median of 0.80, over the past year.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's 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. ELP has a P/S ratio of 0.8. This compares to its industry's average P/S of 1.74.
Finally, investors should note that ELP has a P/CF ratio of 4.35. 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 7.58. Over the past 52 weeks, ELP's P/CF has been as high as 6.47 and as low as 2.90, with a median of 5.29.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Paranaense de Energia is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, ELP feels like a great value stock at the moment.