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Are Investors Undervaluing FS Bancorp (FSBW) Right Now?

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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, value investing is easily one of the most popular ways to find great stocks in any market environment. 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.

FS Bancorp (FSBW - Free Report) is a stock many investors are watching right now. FSBW is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 7.22, which compares to its industry's average of 9.57. Over the past year, FSBW's Forward P/E has been as high as 9 and as low as 5.68, with a median of 6.95.

Another notable valuation metric for FSBW is its P/B ratio of 0.93. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 1.13. FSBW's P/B has been as high as 1.18 and as low as 0.84, with a median of 0.96, over the past year.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. FSBW has a P/S ratio of 1.27. This compares to its industry's average P/S of 1.71.

Finally, investors should note that FSBW has a P/CF ratio of 5.03. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. FSBW's current P/CF looks attractive when compared to its industry's average P/CF of 8.62. FSBW's P/CF has been as high as 6.30 and as low as 4.65, with a median of 5.19, all within the past year.

If you're looking for another solid Banks - West value stock, take a look at Zions Bancorporation (ZION - Free Report) . ZION is a # 2 (Buy) stock with a Value score of A.

Zions Bancorporation is currently trading with a Forward P/E ratio of 9.45 while its PEG ratio sits at 10.74. Both of the company's metrics compare favorably to its industry's average P/E of 9.57 and average PEG ratio of 1.

ZION's price-to-earnings ratio has been as high as 11.20 and as low as 3.73, with a median of 8.64, while its PEG ratio has been as high as 11.09 and as low as 3.69, with a median of 8.09, all within the past year.

Zions Bancorporation also has a P/B ratio of 1.16 compared to its industry's price-to-book ratio of 1.13. Over the past year, its P/B ratio has been as high as 1.39, as low as 0.62, with a median of 1.09.

These are just a handful of the figures considered in FS Bancorp and Zions Bancorporation's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that FSBW and ZION is an impressive value stock right now.


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