Back to top

Image: Bigstock

Is Banco Do Brasil (BDORY) Stock Undervalued Right Now?

Read MoreHide Full Article

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.

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 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.

One company value investors might notice is Banco Do Brasil (BDORY - Free Report) . BDORY is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 4.28, which compares to its industry's average of 7.94. Over the last 12 months, BDORY's Forward P/E has been as high as 4.57 and as low as 1.86, with a median of 3.68.

Investors will also notice that BDORY has a PEG ratio of 0.53. 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. BDORY's PEG compares to its industry's average PEG of 0.67. Within the past year, BDORY's PEG has been as high as 0.59 and as low as 0.10, with a median of 0.46.

Investors should also recognize that BDORY has a P/B ratio of 0.96. 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. This stock's P/B looks attractive against its industry's average P/B of 1.50. Over the past 12 months, BDORY's P/B has been as high as 0.98 and as low as 0.63, with a median of 0.81.

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. BDORY has a P/S ratio of 0.67. This compares to its industry's average P/S of 1.14.

Finally, our model also underscores that BDORY has a P/CF ratio of 4.53. 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. This stock's P/CF looks attractive against its industry's average P/CF of 11.96. Over the past year, BDORY's P/CF has been as high as 4.61 and as low as 3.02, with a median of 3.82.

Banco Santander (SAN - Free Report) may be another strong Banks - Foreign stock to add to your shortlist. SAN is a # 2 (Buy) stock with a Value grade of A.

Banco Santander is currently trading with a Forward P/E ratio of 5.26 while its PEG ratio sits at 0.33. Both of the company's metrics compare favorably to its industry's average P/E of 7.94 and average PEG ratio of 0.67.

SAN's Forward P/E has been as high as 7 and as low as 4.44, with a median of 5.49. During the same time period, its PEG ratio has been as high as 0.38, as low as 0.28, with a median of 0.33.

Furthermore, Banco Santander holds a P/B ratio of 0.57 and its industry's price-to-book ratio is 1.50. SAN's P/B has been as high as 0.66, as low as 0.49, with a median of 0.56 over the past 12 months.

These are only a few of the key metrics included in Banco Do Brasil and Banco Santander strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, BDORY and SAN look like an impressive value stock at the moment.


See More Zacks Research for These Tickers


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


Banco Santander, S.A. (SAN) - free report >>

Banco Do Brasil SA (BDORY) - free report >>

Published in