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Should Value Investors Buy Petrobras (PBR) Stock?

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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.

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.

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 company to watch right now is Petrobras (PBR - Free Report) . PBR is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value.

Another notable valuation metric for PBR is its P/B ratio of 1.24. 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 1.28. PBR's P/B has been as high as 1.67 and as low as 0.79, with a median of 1.19, over the past year.

Finally, we should also recognize that PBR has a P/CF ratio of 3.17. 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. PBR's P/CF compares to its industry's average P/CF of 3.52. Over the past 52 weeks, PBR's P/CF has been as high as 10.63 and as low as 2.40, with a median of 5.57.

These are just a handful of the figures considered in Petrobras's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that PBR is an impressive value stock right now.


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