10 Most Undervalued Stocks to Buy for Under $10

8. Banco Bradesco (NYSE:BBD)  

Number of Hedge Fund Investors: 20  

Forward P/E Ratio as of October 8: 8.77

Stock Price as of October 8: $2.735  

Banco Bradesco (NYSE:BBD) is one of the largest financial institutions in Brazil, providing banking, insurance, and investment services. The bank serves both individuals and businesses, with a vast network of branches throughout the country.

In Q2, Banco Bradesco (NYSE:BBD) reported a 5% year-over-year increase in its loan portfolio, reaching $163 billion. This growth was driven by a 10.2% year-over-year increase in small and medium-sized enterprises (SMEs) and a 5.7% YoY increase in individual loans.

Banco Bradesco’s (NYSE:BBD) loan portfolio growth is a positive sign for the bank’s prospects. Management has been working to improve its risk management practices, which has led to a decline in non-performing loans (NPLs). In Q2, the bank’s NPLs decreased by 50 basis points to 4.3%, with a significant improvement in the 15-90-day delinquency rate.

Banco Bradesco’s (NYSE:BBD) net interest income (NII) also showed a positive trend, increasing by 2.8% quarter-over-quarter to $2.78 billion. The bank’s net financial margin with clients grew by 5% QoQ, despite an 8.4% annual decline. This improvement in NII is a result of the bank’s efforts to increase its lending activities and improve its asset quality.

In addition to its strong lending performance, Banco Bradesco’s (NYSE:BBD) insurance division also delivered impressive results. Insurance revenues grew by 12.7% quarter over quarter and 6.4% year over year to $393 million. The net income of the insurance unit represented 47% of the consolidated result, highlighting the importance of this segment to the bank’s overall profitability.

Banco Bradesco (NYSE:BBD) maintains a robust presence in Brazil’s growing middle-class and emerging market sectors contributing to its long-term growth potential. Banco Bradesco (NYSE:BBD) is also focused on digital transformation, expanding its online banking capabilities and fintech offerings. Despite these positive trends, Banco Bradesco’s (NYSE:BBD) valuation remains attractive with a forward PE ratio of 8.77, which is 26.82% lower than the sector median of 11.98. Analysts forecast that the bank’s earnings will rise by almost 9% in the current year.