Are Investors Undervaluing Pampa Energia (PAM) Right Now?
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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 value investors might notice is Pampa Energia (PAM). PAM is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock is trading with P/E ratio of 4.33 right now. For comparison, its industry sports an average P/E of 12.88. Over the last 12 months, PAM's Forward P/E has been as high as 13.63 and as low as 4.15, with a median of 5.85.
We should also highlight that PAM has a P/B ratio of 0.74. 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 attractive against its industry's average P/B of 2.08. Within the past 52 weeks, PAM's P/B has been as high as 0.92 and as low as 0.51, with a median of 0.77.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's 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. PAM has a P/S ratio of 1.15. This compares to its industry's average P/S of 1.62.
TransAlta (TAC) may be another strong Utility - Electric Power stock to add to your shortlist. TAC is a # 1 (Strong Buy) stock with a Value grade of A.
TransAlta sports a P/B ratio of 2.47 as well; this compares to its industry's price-to-book ratio of 2.08. In the past 52 weeks, TAC's P/B has been as high as 3.24, as low as 1.87, with a median of 2.60.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Pampa Energia and TransAlta are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, PAM and TAC feels like a great value stock at the moment.
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Pampa Energia S.A. (PAM) : Free Stock Analysis Report
TransAlta Corporation (TAC) : Free Stock Analysis Report
