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Is Financial Institutions (FISI) Stock Undervalued Right Now?

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The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One stock to keep an eye on is Financial Institutions (FISI - Free Report) . FISI is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 8.56, which compares to its industry's average of 9.85. Over the past year, FISI's Forward P/E has been as high as 14.41 and as low as 5.16, with a median of 8.60.

Another notable valuation metric for FISI is its P/B ratio of 0.70. 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 solid versus its industry's average P/B of 0.92. FISI's P/B has been as high as 1.28 and as low as 0.53, with a median of 0.67, 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. FISI has a P/S ratio of 1.36. This compares to its industry's average P/S of 1.93.

Finally, we should also recognize that FISI has a P/CF ratio of 6.33. 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. This stock's P/CF looks attractive against its industry's average P/CF of 11.35. Over the past year, FISI's P/CF has been as high as 9.62 and as low as 3.88, with a median of 5.73.

Value investors will likely look at more than just these metrics, but the above data helps show that Financial Institutions is likely undervalued currently. And when considering the strength of its earnings outlook, FISI sticks out at as one of the market's strongest value stocks.


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