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Is Braskem (BAK) Stock Undervalued 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.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

Braskem (BAK - Free Report) is a stock many investors are watching right now. BAK is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 6.95 right now. For comparison, its industry sports an average P/E of 7.13. Over the last 12 months, BAK's Forward P/E has been as high as 7.57 and as low as 2.18, with a median of 4.38.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. BAK has a P/S ratio of 0.33. This compares to its industry's average P/S of 0.54.

Finally, investors will want to recognize that BAK has a P/CF ratio of 1.75. 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. BAK's P/CF compares to its industry's average P/CF of 5.99. Within the past 12 months, BAK's P/CF has been as high as 13.24 and as low as 1.66, with a median of 2.26.

If you're looking for another solid Oil and Gas - Integrated - International value stock, take a look at Vista Oil & Gas (VIST - Free Report) . VIST is a # 2 (Buy) stock with a Value score of A.

Vista Oil & Gas sports a P/B ratio of 1.21 as well; this compares to its industry's price-to-book ratio of 1.32. In the past 52 weeks, VIST's P/B has been as high as 1.46, as low as 0.56, with a median of 0.95.

These are just a handful of the figures considered in Braskem and Vista Oil & Gas'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 BAK and VIST is an impressive value stock right now.


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Braskem S.A. (BAK) - free report >>

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