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Should Value Investors Buy QCR Holdings (QCRH) 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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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 QCR Holdings (QCRH - Free Report) . QCRH is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock holds a P/E ratio of 10.61, while its industry has an average P/E of 12.04. Over the last 12 months, QCRH's Forward P/E has been as high as 12.43 and as low as 6.44, with a median of 9.92.

Another notable valuation metric for QCRH is its P/B ratio of 1.05. The P/B ratio is used to compare a stock's market value with 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 1.41. QCRH's P/B has been as high as 1.34 and as low as 0.68, with a median of 0.88, over the past year.

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. QCRH has a P/S ratio of 1.86. This compares to its industry's average P/S of 2.14.

Finally, we should also recognize that QCRH has a P/CF ratio of 8.20. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 13.36. Within the past 12 months, QCRH's P/CF has been as high as 11.64 and as low as 5.39, with a median of 7.03.

These are only a few of the key metrics included in QCR Holdings'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, QCRH looks like an impressive value stock at the moment.


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