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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.

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.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

BRF (BRFS - Free Report) is a stock many investors are watching right now. 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 2.18. 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 company's current P/B looks solid when compared to its industry's average P/B of 2.20. BRFS's P/B has been as high as 4.18 and as low as 1.03, with a median of 3.48, over the past year.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by 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 0.41. This compares to its industry's average P/S of 1.1.

Value investors will likely look at more than just these metrics, but the above data helps show that BRF is likely undervalued currently. And when considering the strength of its earnings outlook, BRFS sticks out at as one of the market's strongest value stocks.


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