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Is BRF (BRFS) a Great Value Stock Right Now?

Zacks Equity Research

While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

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 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 BRF (BRFS). 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 14.69, which compares to its industry's average of 17.79. Over the past year, BRFS's Forward P/E has been as high as 16,310.99 and as low as -16,424.94, with a median of 28.64.

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Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. 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 0.77. This compares to its industry's average P/S of 1.31.

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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Zacks Investment Research