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Are Investors Undervaluing Petrobras (PBR) Right Now?

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 use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One stock to keep an eye on is Petrobras (PBR). PBR is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.

Investors should also recognize that PBR has a P/B ratio of 1.36. 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 1.93. Over the past year, PBR's P/B has been as high as 1.41 and as low as 0.72, with a median of 0.98.

Finally, investors will want to recognize that PBR has a P/CF ratio of 6.18. 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. PBR's current P/CF looks attractive when compared to its industry's average P/CF of 8.29. PBR's P/CF has been as high as 8.03 and as low as 2.47, with a median of 4.85, all within the past year.

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

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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