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Are Investors Undervaluing BRF (BRFS) Right Now?

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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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 stock to keep an eye on is BRF (BRFS - Free Report) . BRFS is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 9.48, which compares to its industry's average of 16.30. Over the last 12 months, BRFS's Forward P/E has been as high as 44.58 and as low as -13.90, with a median of 14.53.

Another notable valuation metric for BRFS is its P/B ratio of 1.38. 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 attractive against its industry's average P/B of 2.23. BRFS's P/B has been as high as 1.60 and as low as 0.70, with a median of 1.13, 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 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 0.45. This compares to its industry's average P/S of 0.92.

Finally, investors should note that BRFS has a P/CF ratio of 6.71. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 17.51. Over the past 52 weeks, BRFS's P/CF has been as high as 14.72 and as low as -32.62, with a median of 7.66.

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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