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.
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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 Cementos Pacasmayo (CPAC). CPAC 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 8.36 right now. For comparison, its industry sports an average P/E of 15.96. Over the past 52 weeks, CPAC's Forward P/E has been as high as 10.50 and as low as 8.06, with a median of 9.21.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. CPAC has a P/S ratio of 0.8. This compares to its industry's average P/S of 1.88.
These are only a few of the key metrics included in Cementos Pacasmayo's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, CPAC looks like an impressive value stock at the moment.
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