Back to top

Image: Bigstock

Should Value Investors Buy Banco Do Brasil (BDORY) Stock?

Read MoreHide Full Article

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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.

Banco Do Brasil (BDORY - Free Report) is a stock many investors are watching right now. BDORY is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock holds a P/E ratio of 4.11, while its industry has an average P/E of 9.44. Over the past year, BDORY's Forward P/E has been as high as 5.52 and as low as 1.27, with a median of 4.22.

Another notable valuation metric for BDORY is its P/B ratio of 0.73. 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 1.84. BDORY's P/B has been as high as 1 and as low as 0.63, with a median of 0.82, over the past year.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. BDORY has a P/S ratio of 0.5. This compares to its industry's average P/S of 1.28.

Finally, investors should note that BDORY has a P/CF ratio of 3.80. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. BDORY's P/CF compares to its industry's average P/CF of 14.97. Over the past year, BDORY's P/CF has been as high as 4.94 and as low as 3.70, with a median of 4.29.

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


See More Zacks Research for These Tickers


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


Banco Do Brasil SA (BDORY) - free report >>

Published in