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Should Value Investors Buy Petrobras (PBR) Stock?

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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.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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.

One stock to keep an eye on is Petrobras (PBR - Free Report) . PBR is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock is trading with a P/E ratio of 5.67, which compares to its industry's average of 6.17. Over the last 12 months, PBR's Forward P/E has been as high as 15.77 and as low as 5.52, with a median of 9.94.

Another notable valuation metric for PBR is its P/B ratio of 0.93. The P/B is a method of comparing a stock's market value to 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 1.67. Over the past year, PBR's P/B has been as high as 1.34 and as low as 0.72, with a median of 0.93.

Finally, our model also underscores that PBR has a P/CF ratio of 4.22. 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 7.19. PBR's P/CF has been as high as 8.03 and as low as 2.47, with a median of 4.91, all within the past year.

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.


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