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.
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 use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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.
Companhia de saneamento Basico Do Estado De Sao Paulo Sabesp (SBS – Free Report) is a stock many investors are watching right now. SBS is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 12.69, while its industry has an average P/E of 17.75. Over the last 12 months, SBS’s Forward P/E has been as high as 16.72 and as low as 10.93, with a median of 13.85.
SBS is also sporting a PEG ratio of 0.76. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock’s expected earnings growth rate. SBS’s industry has an average PEG of 1.70 right now. SBS’s PEG has been as high as 1.15 and as low as 0.51, with a median of 0.92, all within the past year.
Investors should also recognize that SBS has a P/B ratio of 1.41. Investors use the P/B ratio to look at a stock’s market value versus 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 2.64. SBS’s P/B has been as high as 2.05 and as low as 1.39, with a median of 1.73, over the past year.
Finally, our model also underscores that SBS has a P/CF ratio of 4.25. 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. SBS’s P/CF compares to its industry’s average P/CF of 10.38. SBS’s P/CF has been as high as 9.07 and as low as 4.19, with a median of 7.97, all within the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Companhia de saneamento Basico Do Estado De Sao Paulo Sabesp is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, SBS feels like a great value stock at the moment.
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