Back to top

Image: Bigstock

Is BRF (BRFS) Stock Undervalued Right Now?

Read MoreHide Full Article

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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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.

One stock to keep an eye on is BRF (BRFS - Free Report) . BRFS is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 6.95 right now. For comparison, its industry sports an average P/E of 18.53. BRFS's Forward P/E has been as high as 34.42 and as low as -742.40, with a median of 14.30, all within the past year.

Another valuation metric that we should highlight is BRFS's P/B ratio of 1.10. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. BRFS's current P/B looks attractive when compared to its industry's average P/B of 2.22. Over the past year, BRFS's P/B has been as high as 2.82 and as low as 0.78, with a median of 1.85.

Finally, our model also underscores that BRFS has a P/CF ratio of 11.15. 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. BRFS's P/CF compares to its industry's average P/CF of 17.50. Within the past 12 months, BRFS's P/CF has been as high as 13.87 and as low as 3.92, with a median of 5.44.

If you're looking for another solid Food - Miscellaneous value stock, take a look at United Natural Foods (UNFI - Free Report) . UNFI is a # 2 (Buy) stock with a Value score of A.

United Natural Foods sports a P/B ratio of 1.46 as well; this compares to its industry's price-to-book ratio of 2.22. In the past 52 weeks, UNFI's P/B has been as high as 2.03, as low as 1.22, with a median of 1.41.

These figures are just a handful of the metrics value investors tend to look at, but they help show that BRF and United Natural Foods are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, BRFS and UNFI feels like a great value stock at the moment.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


BRF S.A. (BRFS) - free report >>

United Natural Foods, Inc. (UNFI) - free report >>

Published in