News

Should Value Investors Buy Embotelladora Andina (AKO.B) Stock?

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find 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.

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.

Embotelladora Andina (AKO.B) is a stock many investors are watching right now. AKO.B is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 14.72, which compares to its industry's average of 18.64. Over the last 12 months, AKO.B's Forward P/E has been as high as 14.97 and as low as 10, with a median of 11.58.

Another valuation metric that we should highlight is AKO.B's P/B ratio of 3.88. 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 attractive against its industry's average P/B of 8.76. Over the past year, AKO.B's P/B has been as high as 3.95 and as low as 2.09, with a median of 2.60.

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. AKO.B has a P/S ratio of 1.23. This compares to its industry's average P/S of 1.63.

Finally, investors will want to recognize that AKO.B has a P/CF ratio of 16.73. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 22.36. Over the past 52 weeks, AKO.B's P/CF has been as high as 17.01 and as low as 9.84, with a median of 11.98.

Value investors will likely look at more than just these metrics, but the above data helps show that Embotelladora Andina is likely undervalued currently. And when considering the strength of its earnings outlook, AKO.B sticks out at as one of the market's strongest value stocks.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Embotelladora Andina S.A. (AKO.B) : Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research