Are Investors Undervaluing Companhia Paranaense de Energia COPEL (ELP) Right Now?
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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 stock to keep an eye on is Companhia Paranaense de Energia COPEL (ELP). ELP is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 11.79 right now. For comparison, its industry sports an average P/E of 14.95. ELP's Forward P/E has been as high as 13.47 and as low as 3.37, with a median of 9.84, all within the past year.
Another notable valuation metric for ELP is its P/B ratio of 0.91. The P/B ratio is used to compare a stock's market value with 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 2.29. Over the past 12 months, ELP's P/B has been as high as 1.04 and as low as 0.68, with a median of 0.84.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. ELP has a P/S ratio of 0.66. This compares to its industry's average P/S of 1.89.
If you're looking for another solid Utility - Electric Power value stock, take a look at GDF Suez (ENGIY). ENGIY is a # 1 (Strong Buy) stock with a Value score of A.
Shares of GDF Suez currently holds a Forward P/E ratio of 6.40, and its PEG ratio is 1.73. In comparison, its industry sports average P/E and PEG ratios of 14.95 and 2.09.
ENGIY's price-to-earnings ratio has been as high as 7.10 and as low as 5.06, with a median of 5.91, while its PEG ratio has been as high as 1.73 and as low as 0.84, with a median of 1.43, all within the past year.
GDF Suez also has a P/B ratio of 0.70 compared to its industry's price-to-book ratio of 2.29. Over the past year, its P/B ratio has been as high as 0.83, as low as 0.52, with a median of 0.64.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Companhia Paranaense de Energia COPEL and GDF Suez are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, ELP and ENGIY feels like a great value stock at the moment.
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