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Are Investors Undervaluing Banco Santander-Brazil (BSBR) Right Now?

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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore 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.

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 stock to keep an eye on is Banco Santander-Brazil (BSBR - Free Report) . BSBR is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.

Investors will also notice that BSBR has a PEG ratio of 1.09. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. BSBR's PEG compares to its industry's average PEG of 1.39. Over the past 52 weeks, BSBR's PEG has been as high as 1.22 and as low as 0.71, with a median of 0.95.

Finally, we should also recognize that BSBR has a P/CF ratio of 10.93. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. BSBR's P/CF compares to its industry's average P/CF of 14.16. Over the past year, BSBR's P/CF has been as high as 13.31 and as low as 7.69, with a median of 10.98.

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


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