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Should Value Investors Buy Central Puerto (CEPU) Stock?

·3 min read

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.

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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One company value investors might notice is Central Puerto (CEPU). CEPU is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. CEPU has a P/S ratio of 1.1. This compares to its industry's average P/S of 3.24.

Finally, investors should note that CEPU has a P/CF ratio of 2.88. 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. CEPU's P/CF compares to its industry's average P/CF of 7.49. Within the past 12 months, CEPU's P/CF has been as high as 5.90 and as low as 1.95, with a median of 4.18.

Another great Alternative Energy - Other stock you could consider is Cosan (CSAN), which is a # 2 (Buy) stock with a Value Score of A.

Shares of Cosan currently holds a Forward P/E ratio of 6.95, and its PEG ratio is 0.39. In comparison, its industry sports average P/E and PEG ratios of 17.26 and 1.19.

CSAN's price-to-earnings ratio has been as high as 48.12 and as low as 6.33, with a median of 19.60, while its PEG ratio has been as high as 1.94 and as low as 0.35, with a median of 1.09, all within the past year.

Cosan sports a P/B ratio of 1.38 as well; this compares to its industry's price-to-book ratio of 1.52. In the past 52 weeks, CSAN's P/B has been as high as 1.89, as low as 1.13, with a median of 1.47.

Value investors will likely look at more than just these metrics, but the above data helps show that Central Puerto and Cosan are likely undervalued currently. And when considering the strength of its earnings outlook, CEPU and CSAN sticks out as one of the market's strongest value stocks.

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Central Puerto S.A. Sponsored ADR (CEPU) : Free Stock Analysis Report
Cosan S.A. Sponsored ADR (CSAN) : Free Stock Analysis Report
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