Back to top

Image: Bigstock

Should Value Investors Buy Sierra Bancorp (BSRR) Stock?

Read MoreHide Full Article

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.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

Sierra Bancorp (BSRR - Free Report) is a stock many investors are watching right now. BSRR is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 9.48. This compares to its industry's average Forward P/E of 14.14. BSRR's Forward P/E has been as high as 12.82 and as low as 6.09, with a median of 10.20, all within the past year.

Another valuation metric that we should highlight is BSRR's P/B ratio of 1.01. The P/B ratio pits a stock's market value against 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. BSRR's P/B has been as high as 1.38 and as low as 0.65, 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. BSRR has a P/S ratio of 2.5. This compares to its industry's average P/S of 2.67.

Finally, investors should note that BSRR has a P/CF ratio of 7.37. 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 stock's P/CF looks attractive against its industry's average P/CF of 13.83. BSRR's P/CF has been as high as 9.19 and as low as 4.31, with a median of 6.39, all within the past year.

These are only a few of the key metrics included in Sierra 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, BSRR looks like an impressive value stock at the moment.

In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

Sierra Bancorp (BSRR) - free report >>

Published in