Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put Bank of Commerce Holdings stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:
PE Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, Bank of Commerce has a trailing twelve months PE ratio of 17.3, as you can see in the chart below:
This level actually compares pretty favorably with the market at large, as the PE for the S&P 500 stands at about 20.1. If we focus on the long-term PE trend, Bank of Commerce’s current PE level puts it above its midpoint over the past five years, with the number having risen rapidly over the past few months.
.jpg)
Further, the stock’s PE also compares favorably with the Zacks Categorized Banks-West industry’s trailing twelve months PE ratio, which stands at 20.6. At the very least, this indicates that the stock is relatively undervalued right now, compared to its peers.
We should also point out that Bank of Commerce has a forward PE ratio (price relative to this year’s earnings) of just 13.00, so it is fair to say that a slightly more value-oriented path may be ahead for Bank of Commerce stock in the near term too.
P/S Ratio
Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.
Right now, Bank of Commerce has a P/S ratio of about 3.1. This is fairly lower than the S&P 500 average, which comes in at 5.0 right now. Also, as we can see in the chart below, this is well below the highs for this stock in particular over the past few years.
If anything, BOCH is in the lower end of its range in the time period from a P/S metric, suggesting some level of undervalued trading—at least compared to historical norms.
Broad Value Outlook
In aggregate, Bank of Commerce currently has a Zacks Value Style Score of ‘B’, putting it into the top 40% of all stocks we cover from this look. This makes Bank of Commerce a solid choice for value investors, and some of its other key metrics make this pretty clear too.
For example, its P/CF ratio (another great indicator of value) comes in at 12.98, which is far better than the industry average of 14.96. Clearly, BOCH is a solid choice on the value front from multiple angles.
What About the Stock Overall?
Though Bank of Commerce might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth grade of ‘D’ and a Momentum score of ‘F’. This gives BOCH a Zacks VGM score—or its overarching fundamental grade—of ‘D’. (You can read more about the Zacks Style Scores here >>)
Meanwhile, the company’s recent earnings estimates have not been so encouraging. Both the current quarter and current year have seen none of the estimates going up in the past one month and one downward revision in the same time period.
As a result, the current quarter consensus estimate has fallen by 5% in the past one month, while the full year estimate has gone lower by 5.8%. You can see the consensus estimate trend and recent price actionfor the stock in the chart below:
Notably, the stock has a long term expected earnings growth of 13.8% and sports a Zacks Rank #3 (Hold). These mixed expectations indicate that while the stock’s growth story might be good over the long term, analysts have some apprehensions about the stock in the immediate future. Thus, we are looking for in-line performance from the company in the near term.
Bottom Line
Bank of Commerce is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. Despite a top industry rank (Top 6%) and a Zacks Rank #3, it is hard to get too excited about this company overall.
So, value investors might want to wait for estimates and analyst sentiment to turn around in this name first, but once that happens, this stock could be a compelling pick.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>
Image: Bigstock
Is Bank of Commerce a Suitable Stock for Value Investors?
Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put Bank of Commerce Holdings stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:
PE Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, Bank of Commerce has a trailing twelve months PE ratio of 17.3, as you can see in the chart below:
This level actually compares pretty favorably with the market at large, as the PE for the S&P 500 stands at about 20.1. If we focus on the long-term PE trend, Bank of Commerce’s current PE level puts it above its midpoint over the past five years, with the number having risen rapidly over the past few months.
Further, the stock’s PE also compares favorably with the Zacks Categorized Banks-West industry’s trailing twelve months PE ratio, which stands at 20.6. At the very least, this indicates that the stock is relatively undervalued right now, compared to its peers.
We should also point out that Bank of Commerce has a forward PE ratio (price relative to this year’s earnings) of just 13.00, so it is fair to say that a slightly more value-oriented path may be ahead for Bank of Commerce stock in the near term too.
P/S Ratio
Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.
Right now, Bank of Commerce has a P/S ratio of about 3.1. This is fairly lower than the S&P 500 average, which comes in at 5.0 right now. Also, as we can see in the chart below, this is well below the highs for this stock in particular over the past few years.
If anything, BOCH is in the lower end of its range in the time period from a P/S metric, suggesting some level of undervalued trading—at least compared to historical norms.
Broad Value Outlook
In aggregate, Bank of Commerce currently has a Zacks Value Style Score of ‘B’, putting it into the top 40% of all stocks we cover from this look. This makes Bank of Commerce a solid choice for value investors, and some of its other key metrics make this pretty clear too.
For example, its P/CF ratio (another great indicator of value) comes in at 12.98, which is far better than the industry average of 14.96. Clearly, BOCH is a solid choice on the value front from multiple angles.
What About the Stock Overall?
Though Bank of Commerce might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth grade of ‘D’ and a Momentum score of ‘F’. This gives BOCH a Zacks VGM score—or its overarching fundamental grade—of ‘D’. (You can read more about the Zacks Style Scores here >>)
Meanwhile, the company’s recent earnings estimates have not been so encouraging. Both the current quarter and current year have seen none of the estimates going up in the past one month and one downward revision in the same time period.
As a result, the current quarter consensus estimate has fallen by 5% in the past one month, while the full year estimate has gone lower by 5.8%. You can see the consensus estimate trend and recent price actionfor the stock in the chart below:
Bank of Commerce Holdings (CA) Price and Consensus
Bank of Commerce Holdings (CA) Price and Consensus | Bank of Commerce Holdings (CA) Quote
Notably, the stock has a long term expected earnings growth of 13.8% and sports a Zacks Rank #3 (Hold). These mixed expectations indicate that while the stock’s growth story might be good over the long term, analysts have some apprehensions about the stock in the immediate future. Thus, we are looking for in-line performance from the company in the near term.
Bottom Line
Bank of Commerce is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. Despite a top industry rank (Top 6%) and a Zacks Rank #3, it is hard to get too excited about this company overall.
So, value investors might want to wait for estimates and analyst sentiment to turn around in this name first, but once that happens, this stock could be a compelling pick.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>