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Is FS Bancorp (FSBW) a Great Value Stock 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.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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 FS Bancorp (FSBW - Free Report) . FSBW is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 8.20 right now. For comparison, its industry sports an average P/E of 12.68. FSBW's Forward P/E has been as high as 12.09 and as low as 5.77, with a median of 8.91, all within the past year.

Investors should also note that FSBW holds a PEG ratio of 1.33. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. FSBW's industry currently sports an average PEG of 1.92.

Another notable valuation metric for FSBW is its P/B ratio of 0.93. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 1.16. Over the past 12 months, FSBW's P/B has been as high as 1.47 and as low as 0.64, with a median of 0.88.

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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. FSBW has a P/S ratio of 1.49. This compares to its industry's average P/S of 2.49.

Finally, investors will want to recognize that FSBW has a P/CF ratio of 4.05. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 13.83. FSBW's P/CF has been as high as 8.28 and as low as 3.44, with a median of 4.91, all within the past year.

These are only a few of the key metrics included in FS Bancorp's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, FSBW looks like an impressive value stock at the moment.


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