Is Centrais Eltricas Brasileiras (EBR) a Great Value Stock Right Now?
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.
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.
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 to watch right now is Centrais Eltricas Brasileiras (EBR). EBR is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 9.91, which compares to its industry's average of 14.06. EBR's Forward P/E has been as high as 20.56 and as low as 6.81, with a median of 11.29, all within the past year.
Another notable valuation metric for EBR is its P/B ratio of 0.87. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. EBR's current P/B looks attractive when compared to its industry's average P/B of 2.39. Over the past year, EBR's P/B has been as high as 0.96 and as low as 0.58, with a median of 0.78.
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 prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. EBR has a P/S ratio of 1.82. This compares to its industry's average P/S of 2.14.
Finally, our model also underscores that EBR has a P/CF ratio of 6.39. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 13.63. Within the past 12 months, EBR's P/CF has been as high as 9.40 and as low as 4.54, with a median of 6.18.
Investors could also keep in mind NRG Energy (NRG), an Utility - Electric Power stock with a Zacks Rank of # 2 (Buy) and Value grade of A.
NRG Energy is currently trading with a Forward P/E ratio of 9.95 while its PEG ratio sits at 1.04. Both of the company's metrics compare favorably to its industry's average P/E of 14.06 and average PEG ratio of 2.14.
Over the past year, NRG's P/E has been as high as 13.06, as low as 4.56, with a median of 6.51; its PEG ratio has been as high as 1.24, as low as 0.12, with a median of 2.24 during the same time period.
Furthermore, NRG Energy holds a P/B ratio of 1.78 and its industry's price-to-book ratio is 2.39. NRG's P/B has been as high as 4.39, as low as 1.73, with a median of 2.50 over the past 12 months.
These are just a handful of the figures considered in Centrais Eltricas Brasileiras and NRG Energy'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 EBR and NRG is an impressive value stock right now.
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Centrais Eltricas Brasileiras SA (EBR) : Free Stock Analysis Report
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