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.

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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One company value investors might notice is Banco Do Brasil (BDORY - Free Report) . BDORY is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 3.88 right now. For comparison, its industry sports an average P/E of 8.44. BDORY's Forward P/E has been as high as 4.57 and as low as 3.39, with a median of 3.98, all within the past year.

Investors should also recognize that BDORY has a P/B ratio of 0.86. The P/B is a method of comparing a stock's market value to 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 1.79. Within the past 52 weeks, BDORY's P/B has been as high as 1.02 and as low as 0.76, with a median of 0.89.

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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. BDORY has a P/S ratio of 0.51. This compares to its industry's average P/S of 1.12.

Finally, we should also recognize that BDORY has a P/CF ratio of 4.05. 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 14.13. Over the past 52 weeks, BDORY's P/CF has been as high as 4.95 and as low as 3.55, with a median of 4.16.

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


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