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Are These Finance Stocks Undervalued Right Now?

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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, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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.

One stock to keep an eye on is Banner (BANR - Free Report) . BANR is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 11.28. This compares to its industry's average Forward P/E of 13.08. Over the past 52 weeks, BANR's Forward P/E has been as high as 15.50 and as low as 11.09, with a median of 13.26.

Finally, investors will want to recognize that BANR has a P/CF ratio of 10.08. 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 11.92. BANR's P/CF has been as high as 14.57 and as low as 8.61, with a median of 10.08, all within the past year.

Another great Financial - Savings and Loan stock you could consider is HomeStreet (HMST - Free Report) , which is a # 2 (Buy) stock with a Value Score of A.

Additionally, HomeStreet has a P/B ratio of 1.52 while its industry's price-to-book ratio sits at 1.15. For HMST, this valuation metric has been as high as 1.56, as low as 1.02, with a median of 1.28 over the past year.

These are only a few of the key metrics included in Banner and HomeStreet strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, BANR and HMST look like an impressive value stock at the moment.


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