Should Value Investors Buy Patria Investments Limited (PAX) Stock?

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, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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 Patria Investments Limited (PAX). PAX is currently sporting a Zacks Rank #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 10.79 right now. For comparison, its industry sports an average P/E of 12.41. Over the past year, PAX's Forward P/E has been as high as 11.39 and as low as 7.42, with a median of 8.53.

PAX is also sporting a PEG ratio of 0.73. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. PAX's PEG compares to its industry's average PEG of 0.82. PAX's PEG has been as high as 1.66 and as low as 0.55, with a median of 0.70, all within the past year.

Investors should also recognize that PAX has a P/B ratio of 1.63. 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. PAX's current P/B looks attractive when compared to its industry's average P/B of 2.59. Over the past year, PAX's P/B has been as high as 1.66 and as low as 1.06, with a median of 1.45.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's 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. PAX has a P/S ratio of 1.95. This compares to its industry's average P/S of 2.56.

Finally, investors should note that PAX has a P/CF ratio of 18.91. 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. PAX's current P/CF looks attractive when compared to its industry's average P/CF of 40.91. PAX's P/CF has been as high as 20.70 and as low as 13.43, with a median of 17.40, all within the past year.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Patria Investments Limited is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, PAX feels like a great value stock at the moment.

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

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