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

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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.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

Banco Santander-Brazil (BSBR - Free Report) is a stock many investors are watching right now. BSBR is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 10.77. This compares to its industry's average Forward P/E of 11.36. Over the past 52 weeks, BSBR's Forward P/E has been as high as 12.62 and as low as 4.82, with a median of 8.63.

Investors should also note that BSBR holds a PEG ratio of 1.92. 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. BSBR's industry has an average PEG of 2.08 right now. Over the past 52 weeks, BSBR's PEG has been as high as 6.84 and as low as 0.76, with a median of 3.55.

Finally, investors should note that BSBR has a P/CF ratio of 7.51. 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. This stock's P/CF looks attractive against its industry's average P/CF of 13.73. Within the past 12 months, BSBR's P/CF has been as high as 8.71 and as low as 3.16, with a median of 5.09.

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


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