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Is Pampa Energia (PAM) a Great Value Stock Right Now?

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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.

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.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One stock to keep an eye on is Pampa Energia (PAM - Free Report) . PAM is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock holds a P/E ratio of 7.58, while its industry has an average P/E of 15.66. PAM's Forward P/E has been as high as 8.23 and as low as 3.88, with a median of 6.18, all within the past year.

We should also highlight that PAM has a P/B ratio of 1.06. 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 stock's P/B looks attractive against its industry's average P/B of 2.49. PAM's P/B has been as high as 1.13 and as low as 0.61, with a median of 0.85, over the past year.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. PAM has a P/S ratio of 1.85. This compares to its industry's average P/S of 2.07.

Finally, investors should note that PAM has a P/CF ratio of 5.06. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. PAM's P/CF compares to its industry's average P/CF of 12.49. Within the past 12 months, PAM's P/CF has been as high as 5.06 and as low as 2.29, with a median of 3.66.

These are only a few of the key metrics included in Pampa Energia'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, PAM looks like an impressive value stock at the moment.


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