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Are Investors Undervaluing BRF (BRFS) Right Now?

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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

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 use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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.

BRF (BRFS - Free Report) is a stock many investors are watching right now. BRFS is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.

We should also highlight that BRFS has a P/B ratio of 1.17. The P/B ratio pits a stock's market value against 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 2.17. BRFS's P/B has been as high as 1.19 and as low as 0.51, with a median of 0.98, over the past year.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. BRFS has a P/S ratio of 0.38. This compares to its industry's average P/S of 0.95.

Finally, we should also recognize that BRFS has a P/CF ratio of 14.32. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. BRFS's P/CF compares to its industry's average P/CF of 14.64. BRFS's P/CF has been as high as 24.59 and as low as -43.64, with a median of -15.12, all within the past year.

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


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