Is Paranaense de Energia (ELP) a Great Value Stock Right Now?
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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. 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 to watch right now is Paranaense de Energia (ELP). ELP is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 11.09 right now. For comparison, its industry sports an average P/E of 12.90. Over the past year, ELP's Forward P/E has been as high as 14.21 and as low as 5.94, with a median of 10.41.
Another valuation metric that we should highlight is ELP's P/B ratio of 0.89. 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 company's current P/B looks solid when compared to its industry's average P/B of 1.52. ELP's P/B has been as high as 1.10 and as low as 0.51, with a median of 0.85, over the past year.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. ELP has a P/S ratio of 0.8. This compares to its industry's average P/S of 1.84.
Finally, our model also underscores that ELP has a P/CF ratio of 3.42. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. ELP's P/CF compares to its industry's average P/CF of 7.41. ELP's P/CF has been as high as 6.47 and as low as 2.90, with a median of 4.03, all within the past year.
These are just a handful of the figures considered in Paranaense de Energia's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that ELP is an impressive value stock right now.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.