Yahoo Finance Are Investors Undervaluing Pampa Energia (PAM) Right Now?
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
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.
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 Pampa Energia (PAM). PAM is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock is trading with a P/E ratio of 5.34, which compares to its industry's average of 14.33. Over the past 52 weeks, PAM's Forward P/E has been as high as 13.63 and as low as 4.02, with a median of 5.69.
We should also highlight that PAM has a P/B ratio of 0.80. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. PAM's current P/B looks attractive when compared to its industry's average P/B of 2.17. Over the past year, PAM's P/B has been as high as 0.87 and as low as 0.51, with a median of 0.65.
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 1.07. This compares to its industry's average P/S of 1.9.
Investors could also keep in mind TransAlta (TAC), an Utility - Electric Power stock with a Zacks Rank of # 1 (Strong Buy) and Value grade of A.
Furthermore, TransAlta holds a P/B ratio of 2.70 and its industry's price-to-book ratio is 2.17. TAC's P/B has been as high as 3.24, as low as 1.87, with a median of 2.32 over the past 12 months.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Pampa Energia and TransAlta are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, PAM and TAC feels like a great value stock at the moment.
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Pampa Energia S.A. (PAM) : Free Stock Analysis Report
TransAlta Corporation (TAC) : Free Stock Analysis Report
