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Why This 1 Value Stock Could Be a Great Addition to Your Portfolio

Zacks Equity Research
·2-min read

Taking full advantage of the stock market and investing with confidence are common goals for new and old investors alike.

While you may have an investing style you rely on, finding great stocks is made easier with the Zacks Style Scores. These are complementary indicators that rate stocks based on value, growth, and/or momentum characteristics.

Why Investors Should Pay Attention to This Value Stock

Different than growth or momentum investors, value-focused investors are all about finding good stocks at good prices, and discovering which companies are trading under what their true value is before the broader market catches on. The Value Style Score utilizes ratios like P/E, PEG, Price/Sales, and Price/Cash Flow to help pick out the most attractive and discounted stocks.

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CBD (CBD)

Companhia Brasileira de Distribuicao or Grupo Pao de Acucar ("GPA") is the largest food retailer in South America. The company operates through a multiformat and multichannel business model. With presence all over Brazil, along with in Colombia, Argentina and Uruguay through Grupo Exito, the company brings together renowned retail chains and brands such as Compre Bem, Extra and Pao de Acucar private-label brands like Qualita, Club des Sommeliers and Finlandek to name a few.

CBD boasts a Value Style Score of A and VGM Score of A, and holds a Zacks Rank #3 (Hold) rating. Shares of CBD are trading at a forward earnings multiple of 2.4X, as well as a PEG Ratio of 0.1, a Price/Cash Flow ratio of 2.1X, and a Price/Sales ratio of 0.1X.

Value investors don't just pay attention to a company's valuation ratios; positive earnings play a crucial role, too. One analyst revised their earnings estimate upwards in the last 60 days for fiscal 2022. The Zacks Consensus Estimate has increased $0.72 to $1.71 per share. CBD has an average earnings surprise of 100%.

CBD should be on investors' short lists because of its impressive earnings and valuation fundamentals, a good Zacks Rank, and strong Value and VGM Style Scores.


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Companhia Brasileira de Distribuicao (CBD) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.