Are Investors Undervaluing These Utilities Stocks 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...
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, 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 to watch right now is Pampa Energia (PAM). PAM is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 6.01, which compares to its industry's average of 15.43. Over the past 52 weeks, PAM's Forward P/E has been as high as 40.27 and as low as 4.35, with a median of 5.96.
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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. PAM has a P/S ratio of 0.8. This compares to its industry's average P/S of 2.11.
RWE AG (RWEOY) may be another strong Utility - Electric Power stock to add to your shortlist. RWEOY is a # 2 (Buy) stock with a Value grade of A.
Furthermore, RWE AG holds a P/B ratio of 0.95 and its industry's price-to-book ratio is 2.02. RWEOY's P/B has been as high as 1.41, as low as 0.81, with a median of 0.95 over the past 12 months.
These are only a few of the key metrics included in Pampa Energia and RWE AG strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, PAM and RWEOY look like an impressive value stock at the moment.
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Pampa Energia S.A. (PAM): Free Stock Analysis Report
RWE AG (RWEOY): Free Stock Analysis Report
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