Back to top

Image: Bigstock

Are Investors Undervaluing Petrobras (PBR) Right Now?

Read MoreHide Full Article

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.

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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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.

Petrobras (PBR - Free Report) is a stock many investors are watching right now. PBR is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A.

Investors should also recognize that PBR has a P/B ratio of 0.97. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. PBR's current P/B looks attractive when compared to its industry's average P/B of 1.19. Over the past year, PBR's P/B has been as high as 1.67 and as low as 0.79, with a median of 1.03.

Finally, we should also recognize that PBR has a P/CF ratio of 2.32. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 3.72. Over the past 52 weeks, PBR's P/CF has been as high as 10.63 and as low as 2.04, with a median of 3.49.

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


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Petroleo Brasileiro S.A.- Petrobras (PBR) - free report >>

Published in