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Are Investors Undervaluing Telefonica Brasil (VIV) 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.

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 Telefonica Brasil (VIV - Free Report) . VIV is currently sporting a Zacks Rank #1 (Strong Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 17.51, which compares to its industry's average of 18.96. Over the last 12 months, VIV's Forward P/E has been as high as 17.57 and as low as 10.45, with a median of 13.10.

Investors will also notice that VIV has a PEG ratio of 0.80. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. VIV's PEG compares to its industry's average PEG of 1.41. Over the past 52 weeks, VIV's PEG has been as high as 1.14 and as low as 0.63, with a median of 0.81.

We should also highlight that VIV has a P/B ratio of 1.58. 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 attractive against its industry's average P/B of 2.50. Over the past 12 months, VIV's P/B has been as high as 1.67 and as low as 0.96, with a median of 1.20.

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


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