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Should Value Investors Buy Central Puerto (CEPU) Stock?

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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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.

Central Puerto (CEPU - Free Report) is a stock many investors are watching right now. CEPU is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock has a Forward P/E ratio of 4.59. This compares to its industry's average Forward P/E of 6.58. Over the last 12 months, CEPU's Forward P/E has been as high as 55.15 and as low as 3.91, with a median of 14.78.

Another notable valuation metric for CEPU is its P/B ratio of 0.92. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. CEPU's current P/B looks attractive when compared to its industry's average P/B of 1.71. CEPU's P/B has been as high as 1.08 and as low as 0.36, with a median of 0.62, 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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. CEPU has a P/S ratio of 2.07. This compares to its industry's average P/S of 2.14.

These are only a few of the key metrics included in Central Puerto'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, CEPU looks like an impressive value stock at the moment.


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