Back to top

Image: Bigstock

Should Value Investors Buy BRF (BRFS) Stock?

Read MoreHide Full Article

While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of 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.

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 holding a Zacks Rank of #2 (Buy) and a Value grade of A.

Investors should also recognize that BRFS has a P/B ratio of 1.13. 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. This stock's P/B looks solid versus its industry's average P/B of 2.27. Over the past 12 months, BRFS's P/B has been as high as 1.19 and as low as 0.59, with a median of 0.99.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by 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 0.36. This compares to its industry's average P/S of 0.96.

Finally, our model also underscores that BRFS has a P/CF ratio of 13.73. 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. This stock's P/CF looks attractive against its industry's average P/CF of 14.71. Over the past 52 weeks, BRFS's P/CF has been as high as 24.59 and as low as -41.73, with a median of -14.72.

These are just a handful of the figures considered in BRF'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 BRFS is an impressive value stock right now.


See More Zacks Research for These Tickers


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


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

Published in