Should Value Investors Buy Pampa Energia (PAM) Stock?
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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of 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.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One stock to keep an eye on 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 P/E ratio of 6.57 right now. For comparison, its industry sports an average P/E of 14.24. Over the past 52 weeks, PAM's Forward P/E has been as high as 8.23 and as low as 3.88, with a median of 6.02.
Another valuation metric that we should highlight is PAM's P/B ratio of 0.93. The P/B ratio is used to compare a stock's market value with 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 2.03. PAM's P/B has been as high as 1.13 and as low as 0.61, with a median of 0.84, over the past year.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. PAM has a P/S ratio of 1.55. This compares to its industry's average P/S of 1.98.
Finally, we should also recognize that PAM has a P/CF ratio of 3.83. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 8.68. Over the past year, PAM's P/CF has been as high as 4.69 and as low as 2.38, with a median of 3.14.
Value investors will likely look at more than just these metrics, but the above data helps show that Pampa Energia is likely undervalued currently. And when considering the strength of its earnings outlook, PAM sticks out at as one of the market's strongest value stocks.
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Pampa Energia S.A. (PAM) : Free Stock Analysis Report
