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Should Value Investors Buy BRF (BRFS) Stock?

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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.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. 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 company to watch right now is BRF (BRFS - Free Report) . BRFS is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value.

We should also highlight that BRFS has a P/B ratio of 1.25. The P/B ratio pits a stock's market value against 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 2.14. BRFS's P/B has been as high as 1.25 and as low as 0.70, with a median of 1.02, 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 prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. BRFS has a P/S ratio of 0.42. This compares to its industry's average P/S of 0.9.

Finally, we should also recognize that BRFS has a P/CF ratio of 8.38. 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. BRFS's P/CF compares to its industry's average P/CF of 16.57. BRFS's P/CF has been as high as 157.18 and as low as 6.04, with a median of 44.48, all within the past year.

These are only a few of the key metrics included in BRF's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, BRFS looks like an impressive value stock at the moment.


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