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Is Fibria Celulose (FBR) Stock Undervalued Right Now?

Zacks Equity Research
MGIC (MTG) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues.

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, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One company value investors might notice is Fibria Celulose (FBR). FBR is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 6.49. This compares to its industry's average Forward P/E of 9.28. FBR's Forward P/E has been as high as 17.91 and as low as 6.49, with a median of 11.29, all within the past year.

Investors should also note that FBR holds a PEG ratio of 0.86. 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. FBR's industry currently sports an average PEG of 0.90. FBR's PEG has been as high as 0.92 and as low as 0.68, with a median of 0.76, all within the past year.

Another notable valuation metric for FBR is its P/B ratio of 2.40. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. FBR's current P/B looks attractive when compared to its industry's average P/B of 2.41. Within the past 52 weeks, FBR's P/B has been as high as 2.65 and as low as 1.57, with a median of 2.26.

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


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