Patria Investments

Patria Investments Ltd earns a 5-star quantitative star rating, indicating our belief that this share class offers a compelling opportunity for investors. The stock currently trades at a 18% discount to our quantitative fair value estimate of $13.70 per share; however, some caution is warranted due to this estimate's medium uncertainty rating.

The firm's profitability increases our fair value estimate. Highly profitable companies are often more resilient in recessions and are likely to generate stronger future cash flows for shareholders. For example, the firm's earnings yield of 8.2% sits in the top 30% globally. This suggests that it is generating substantial earnings relative to its share price, which contributes to our view that shares are undervalued.

The company's favorable dividend structure is an additional encouraging factor. Dividends represent a stable form of future cash flows returned to shareholders, reducing the perceived risk of a business. The firm's forward dividend yield of 6.4%, for example, ranks in the top 10% compared with global peers. Expected dividend payments over the coming year relative to the current share price are favorable, which further promotes our favorable price/fair value ratio.

This company lacks a competitive advantage, receiving a quantitative economic moat rating of none. Additionally, the firm's moderate financial health score suggests it is acceptably positioned against adverse economic circumstances.