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Should Value Investors Buy Old Second Bancorp (OSBC) Stock?
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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One stock to keep an eye on is Old Second Bancorp (OSBC - Free Report) . OSBC is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 10.43, which compares to its industry's average of 12.52. OSBC's Forward P/E has been as high as 15.31 and as low as 5.69, with a median of 10.53, all within the past year.
OSBC is also sporting a PEG ratio of 1.45. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. OSBC's PEG compares to its industry's average PEG of 2.15. Over the last 12 months, OSBC's PEG has been as high as 1.49 and as low as 1.33, with a median of 1.45.
Another notable valuation metric for OSBC is its P/B ratio of 0.85. 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 1.41. Over the past year, OSBC's P/B has been as high as 1.50 and as low as 0.67, with a median of 1.18.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. OSBC has a P/S ratio of 1.64. This compares to its industry's average P/S of 1.86.
Finally, investors will want to recognize that OSBC has a P/CF ratio of 6.77. 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. OSBC's current P/CF looks attractive when compared to its industry's average P/CF of 13.36. Over the past year, OSBC's P/CF has been as high as 9.65 and as low as 4.27, with a median of 7.57.
Value investors will likely look at more than just these metrics, but the above data helps show that Old Second Bancorp is likely undervalued currently. And when considering the strength of its earnings outlook, OSBC sticks out at as one of the market's strongest value stocks.
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Should Value Investors Buy Old Second Bancorp (OSBC) Stock?
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One stock to keep an eye on is Old Second Bancorp (OSBC - Free Report) . OSBC is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 10.43, which compares to its industry's average of 12.52. OSBC's Forward P/E has been as high as 15.31 and as low as 5.69, with a median of 10.53, all within the past year.
OSBC is also sporting a PEG ratio of 1.45. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. OSBC's PEG compares to its industry's average PEG of 2.15. Over the last 12 months, OSBC's PEG has been as high as 1.49 and as low as 1.33, with a median of 1.45.
Another notable valuation metric for OSBC is its P/B ratio of 0.85. 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 1.41. Over the past year, OSBC's P/B has been as high as 1.50 and as low as 0.67, with a median of 1.18.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. OSBC has a P/S ratio of 1.64. This compares to its industry's average P/S of 1.86.
Finally, investors will want to recognize that OSBC has a P/CF ratio of 6.77. 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. OSBC's current P/CF looks attractive when compared to its industry's average P/CF of 13.36. Over the past year, OSBC's P/CF has been as high as 9.65 and as low as 4.27, with a median of 7.57.
Value investors will likely look at more than just these metrics, but the above data helps show that Old Second Bancorp is likely undervalued currently. And when considering the strength of its earnings outlook, OSBC sticks out at as one of the market's strongest value stocks.