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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company value investors might notice is Sierra Bancorp (BSRR - Free Report) . BSRR is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 10.38. This compares to its industry's average Forward P/E of 17.10. Over the last 12 months, BSRR's Forward P/E has been as high as 11.19 and as low as 8.46, with a median of 9.90.
Investors should also recognize that BSRR has a P/B ratio of 1.15. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 2.24. Within the past 52 weeks, BSRR's P/B has been as high as 1.27 and as low as 0.96, with a median of 1.08.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. BSRR has a P/S ratio of 2.9. This compares to its industry's average P/S of 3.51.
Finally, investors should note that BSRR has a P/CF ratio of 7.96. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. BSRR's current P/CF looks attractive when compared to its industry's average P/CF of 18.37. Within the past 12 months, BSRR's P/CF has been as high as 9.58 and as low as 6.58, with a median of 7.91.
If you're looking for another solid Banks - West value stock, take a look at FS Bancorp (FSBW - Free Report) . FSBW is a # 2 (Buy) stock with a Value score of A.
FS Bancorp also has a P/B ratio of 1.23 compared to its industry's price-to-book ratio of 2.24. Over the past year, its P/B ratio has been as high as 1.35, as low as 0.97, with a median of 1.19.
Value investors will likely look at more than just these metrics, but the above data helps show that Sierra Bancorp and FS Bancorp are likely undervalued currently. And when considering the strength of its earnings outlook, BSRR and FSBW sticks out as one of the market's strongest value stocks.
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Should Value Investors Buy These Finance Stocks?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company value investors might notice is Sierra Bancorp (BSRR - Free Report) . BSRR is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 10.38. This compares to its industry's average Forward P/E of 17.10. Over the last 12 months, BSRR's Forward P/E has been as high as 11.19 and as low as 8.46, with a median of 9.90.
Investors should also recognize that BSRR has a P/B ratio of 1.15. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 2.24. Within the past 52 weeks, BSRR's P/B has been as high as 1.27 and as low as 0.96, with a median of 1.08.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. BSRR has a P/S ratio of 2.9. This compares to its industry's average P/S of 3.51.
Finally, investors should note that BSRR has a P/CF ratio of 7.96. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. BSRR's current P/CF looks attractive when compared to its industry's average P/CF of 18.37. Within the past 12 months, BSRR's P/CF has been as high as 9.58 and as low as 6.58, with a median of 7.91.
If you're looking for another solid Banks - West value stock, take a look at FS Bancorp (FSBW - Free Report) . FSBW is a # 2 (Buy) stock with a Value score of A.
FS Bancorp also has a P/B ratio of 1.23 compared to its industry's price-to-book ratio of 2.24. Over the past year, its P/B ratio has been as high as 1.35, as low as 0.97, with a median of 1.19.
Value investors will likely look at more than just these metrics, but the above data helps show that Sierra Bancorp and FS Bancorp are likely undervalued currently. And when considering the strength of its earnings outlook, BSRR and FSBW sticks out as one of the market's strongest value stocks.