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Should Value Investors Buy Sierra Bancorp (BSRR) Stock?

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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.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. 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 company value investors might notice is Sierra Bancorp (BSRR - Free Report) . BSRR is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 10.54, while its industry has an average P/E of 13.73. BSRR's Forward P/E has been as high as 12.82 and as low as 8.17, with a median of 10.17, all within the past year.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. 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 3.08. This compares to its industry's average P/S of 3.27.

Finally, investors will want to recognize that BSRR has a P/CF ratio of 9.19. 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 13.83. BSRR's P/CF has been as high as 9.58 and as low as 5.19, with a median of 6.64, all within the past year.

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


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