Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put Fibria Celulose S.A. stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:
P/E Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, Fibria Celulose has a trailing twelve months PE ratio of 9.54, as you can see in the chart below:
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If we focus on the stock’s long-term PE trend, Fibria Celulose has seen huge bouts of volatility. Most of the stock’s earnings till mid-2014 were actually in the negative or close to break-even territory, putting the PE multiple also at a negative figure most of the times. Post 2014, the stock has seen consistent periods of high PE multiples so much so that it went till about 1,477x in 2015! Since beginning of 2016, the stock’s PE has remained somewhat stable in the positive territory.
Again, this level actually compares pretty favorably with the market at large, as the PE for the S&P 500 stands at about 20.17. If we focus on the long-term PE trend, FBR’s current PE level puts it below its midpoint over the past five years.
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Further, the stock’s PE compares favorably with the Zacks categorized Paper & Paper Products industry’s trailing twelve months PE ratio, which stands at 16.93. This indicates that the stock is significantly undervalued right now, compared to its peers.
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However, we should also point out that Fibria Celulose has a forward PE ratio (price relative to this year’s earnings) of 16.77, so it is fair to expect an increase in the company’s share price in the near future.
P/S Ratio
Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.
Right now, Fibria Celulose has a P/S ratio of about 1.98. This is lower than the industry average, which comes in at 3.13 right now. Also, as we can see in the chart below, this is below the highs for this stock in particular over the past few years.
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In comparison to its own trend, the stock seems to be in the medium zone (as its median stands at about 1.92). This does not provide us with a conclusive direction as to enter or not to enter.
Broad Value Outlook
In aggregate, Fibria Celulose currently has a Zacks Value Style Score of ‘A’, putting it into the top 20% of all stocks we cover from this look. This is because some of its other key metrics are favorable.
For example, the PEG ratio for FBR is just 0.91, a level that is lower than the industry average of 1.92. The PEG ratio is a modified PE ratio that takes into account the stock’s earnings growth rate. Again, its P/CF ratio (another great indicator of value) comes in at 4.95, which is better than the industry average of 6.98. Clearly, FBR is a solid choice on the value front from multiple angles.
What About the Stock Overall?
There are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth grade of ‘C’ and a Momentum score of ‘A’. This gives FBR a Zacks VGM score—or its overarching fundamental grade—of ‘A’. (You can read more about the Zacks Style Scores here >>)
Meanwhile, the company’s recent earnings estimates have been encouraging as both the current year and next has seen one upward estimate revision in the past sixty days compared to none downward.
As a result, the current year consensus estimate has risen by 87.5% in the past two months, while the full year estimate has inched higher by 63.3%. You can see the consensus estimate trend and recent price action for the stock in the chart below:
Fibria Celulose S.A. Price and Consensus
This positive trend signifies bullish analyst sentiment, and its Zacks Rank #2 (Buy) indicates robust fundamentals and expectations of outperformance in the near term.
Bottom Line
Fibria Celulose is an inspired choice for value investors, as it is hard to beat its good lineup of statistics on this front. Boasting a good industry rank (top 25%) and a Zacks Rank #2, the company deserves attention right now. In fact, over the past one year, the Zacks Paper & Paper Products industry has clearly outperformed the broader market, as you can see below:
.jpg)
So, it might pay for value investors to delve deeper into the company’s prospects, as fundamentals indicate that this stock could be a compelling pick.
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And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation. See Them Free>>
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Is Fibria Celulose (FBR) a Solid Stock for Value Investors?
Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put Fibria Celulose S.A. stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:
P/E Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, Fibria Celulose has a trailing twelve months PE ratio of 9.54, as you can see in the chart below:
If we focus on the stock’s long-term PE trend, Fibria Celulose has seen huge bouts of volatility. Most of the stock’s earnings till mid-2014 were actually in the negative or close to break-even territory, putting the PE multiple also at a negative figure most of the times. Post 2014, the stock has seen consistent periods of high PE multiples so much so that it went till about 1,477x in 2015! Since beginning of 2016, the stock’s PE has remained somewhat stable in the positive territory.
Again, this level actually compares pretty favorably with the market at large, as the PE for the S&P 500 stands at about 20.17. If we focus on the long-term PE trend, FBR’s current PE level puts it below its midpoint over the past five years.
Further, the stock’s PE compares favorably with the Zacks categorized Paper & Paper Products industry’s trailing twelve months PE ratio, which stands at 16.93. This indicates that the stock is significantly undervalued right now, compared to its peers.
However, we should also point out that Fibria Celulose has a forward PE ratio (price relative to this year’s earnings) of 16.77, so it is fair to expect an increase in the company’s share price in the near future.
P/S Ratio
Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.
Right now, Fibria Celulose has a P/S ratio of about 1.98. This is lower than the industry average, which comes in at 3.13 right now. Also, as we can see in the chart below, this is below the highs for this stock in particular over the past few years.
In comparison to its own trend, the stock seems to be in the medium zone (as its median stands at about 1.92). This does not provide us with a conclusive direction as to enter or not to enter.
Broad Value Outlook
In aggregate, Fibria Celulose currently has a Zacks Value Style Score of ‘A’, putting it into the top 20% of all stocks we cover from this look. This is because some of its other key metrics are favorable.
For example, the PEG ratio for FBR is just 0.91, a level that is lower than the industry average of 1.92. The PEG ratio is a modified PE ratio that takes into account the stock’s earnings growth rate. Again, its P/CF ratio (another great indicator of value) comes in at 4.95, which is better than the industry average of 6.98. Clearly, FBR is a solid choice on the value front from multiple angles.
What About the Stock Overall?
There are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth grade of ‘C’ and a Momentum score of ‘A’. This gives FBR a Zacks VGM score—or its overarching fundamental grade—of ‘A’. (You can read more about the Zacks Style Scores here >>)
Meanwhile, the company’s recent earnings estimates have been encouraging as both the current year and next has seen one upward estimate revision in the past sixty days compared to none downward.
As a result, the current year consensus estimate has risen by 87.5% in the past two months, while the full year estimate has inched higher by 63.3%. You can see the consensus estimate trend and recent price action for the stock in the chart below:
Fibria Celulose S.A. Price and Consensus
Fibria Celulose S.A. Price and Consensus | Fibria Celulose S.A. Quote
This positive trend signifies bullish analyst sentiment, and its Zacks Rank #2 (Buy) indicates robust fundamentals and expectations of outperformance in the near term.
Bottom Line
Fibria Celulose is an inspired choice for value investors, as it is hard to beat its good lineup of statistics on this front. Boasting a good industry rank (top 25%) and a Zacks Rank #2, the company deserves attention right now. In fact, over the past one year, the Zacks Paper & Paper Products industry has clearly outperformed the broader market, as you can see below:
So, it might pay for value investors to delve deeper into the company’s prospects, as fundamentals indicate that this stock could be a compelling pick.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation. See Them Free>>