Investors interested in Food - Miscellaneous stocks are likely familiar with BRF (BRFS) and Celsius Holdings Inc. (CELH). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Currently, BRF has a Zacks Rank of #2 (Buy), while Celsius Holdings Inc. has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that BRFS is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
BRFS currently has a forward P/E ratio of 9.23, while CELH has a forward P/E of 39.05. We also note that BRFS has a PEG ratio of 0.23. 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. CELH currently has a PEG ratio of 1.04.
Another notable valuation metric for BRFS is its P/B ratio of 1.35. 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. By comparison, CELH has a P/B of 21.28.
These are just a few of the metrics contributing to BRFS's Value grade of B and CELH's Value grade of D.
BRFS is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that BRFS is likely the superior value option right now.
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BRF S.A. (BRFS): Free Stock Analysis Report Celsius Holdings Inc. (CELH): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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