BRF SA (BRFS, Financial), a leading player in the Consumer Packaged Goods industry, has seen a significant uptick in its stock price over the past three months. The company's shares have surged by 12.56%, marking a notable gain from $2.39 to a market cap of $4.01 billion. Over the past week alone, the stock has seen a 6.67% gain. However, the company's GF Value of $3.49, down from $4.19 three months ago, suggests a possible value trap. This article delves into the factors driving this performance and provides an in-depth analysis of the company's profitability, growth, and competitive landscape.
Company Overview: BRF SA
BRF SA is a global producer of fresh and frozen protein foods. The company's product portfolio includes marinated, frozen, whole and cut meat, specialty meats, portioned products, and frozen prepared entrees. Additionally, BRF SA offers margarine, sweet specialties, sandwiches, mayonnaise, and animal feed. Its most well-known brands are Sadia, Chester, Perdix, Paty, Perdigao, and Qualy. The company's leading international brand, Sadia, is present in multiple categories in Middle Eastern countries. Sales are evenly distributed between Brazil and international markets.
Profitability Analysis
BRF SA's Profitability Rank stands at 6/10, indicating a moderate level of profitability within its industry. The company's operating margin of -0.76% is better than 23.32% of companies in the same industry. However, the company's ROE of -31.23%, ROA of -6.00%, and ROIC of -1.07% are all in the negative, suggesting that the company is not generating a positive return on its equity, assets, or invested capital. Over the past decade, the company has had 6 profitable years, which is better than 34.28% of companies in the same industry.
Growth Prospects
BRF SA's Growth Rank is 8/10, indicating a high level of growth within its industry. The company's 3-year revenue growth rate per share stands at 7.50%, which is better than 52.91% of companies in the same industry. Furthermore, its 5-year revenue growth rate per share of 11.60% is better than 76.12% of companies in the same industry. These figures suggest that BRF SA has been successful in expanding its revenue base over the past few years.
Key Holders
Among the key holders of BRF SA's stock, Jim Simons (Trades, Portfolio) stands out with 1,098,060 shares, accounting for 0.07% of the company's shares.
Competitive Landscape
BRF SA operates in a competitive industry, with key competitors including M Dias Branco SA Industria e Comercio de Alimentos (market cap: $2.3 billion), Marfrig Global Foods SA (market cap: $1.29 billion), and Jalles Machado SA (market cap: $520.005 million).
Conclusion
In conclusion, BRF SA's stock performance over the past three months has been impressive, with a 12.56% gain. However, the company's GF Value suggests a possible value trap, warranting caution for potential investors. While the company's profitability rank is moderate, its negative operating margin, ROE, ROA, and ROIC indicate challenges in generating positive returns. On the growth front, BRF SA has demonstrated strong growth in its revenue per share over the past three to five years. The company's competitive landscape is robust, with several key players in the Consumer Packaged Goods industry. As such, potential investors should carefully consider these factors when evaluating BRF SA's current position and potential future performance.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
