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Is Banco Santander-Brazil (BSBR) a Great Value Stock Right Now?

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Zacks Equity Research
·3 min read
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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, 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 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 Santander-Brazil (BSBR). BSBR is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 9.08 right now. For comparison, its industry sports an average P/E of 11.06. Over the past 52 weeks, BSBR's Forward P/E has been as high as 12.62 and as low as 4.82, with a median of 8.64.

We also note that BSBR holds a PEG ratio of 1.11. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. BSBR's industry currently sports an average PEG of 2.03. Within the past year, BSBR's PEG has been as high as 6.84 and as low as 0.76, with a median of 3.55.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's 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. BSBR has a P/S ratio of 1.44. This compares to its industry's average P/S of 1.57.

Finally, we should also recognize that BSBR has a P/CF ratio of 6.84. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. BSBR's P/CF compares to its industry's average P/CF of 13.73. Over the past 52 weeks, BSBR's P/CF has been as high as 8.71 and as low as 3.16, with a median of 5.09.

These are just a handful of the figures considered in Banco Santander-Brazil's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that BSBR is an impressive value stock right now.


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