Are Investors Undervaluing Ultrapar Participacoes (UGP) Right Now?
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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader 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.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One company value investors might notice is Ultrapar Participacoes (UGP). UGP is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 14.09, which compares to its industry's average of 14.29. UGP's Forward P/E has been as high as 15.89 and as low as 8.89, with a median of 10.85, all within the past year.
Finally, investors will want to recognize that UGP has a P/CF ratio of 6.35. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. UGP's P/CF compares to its industry's average P/CF of 8.97. Over the past 52 weeks, UGP's P/CF has been as high as 6.88 and as low as 3.70, with a median of 5.85.
Value investors will likely look at more than just these metrics, but the above data helps show that Ultrapar Participacoes is likely undervalued currently. And when considering the strength of its earnings outlook, UGP sticks out at as one of the market's strongest value stocks.
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Ultrapar Participacoes S.A. (UGP) : Free Stock Analysis Report
