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Are Investors Undervaluing Sierra Bancorp (BSRR) Right Now?

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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

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 Sierra Bancorp (BSRR - Free Report) . BSRR is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 10.86, which compares to its industry's average of 17.45. Over the past year, BSRR's Forward P/E has been as high as 11.19 and as low as 8.46, with a median of 9.87.

Investors should also recognize that BSRR has a P/B ratio of 1.19. 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 2.31. Over the past 12 months, BSRR's P/B has been as high as 1.27 and as low as 0.96, with a median of 1.11.

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 3.03. This compares to its industry's average P/S of 3.59.

Finally, investors will want to recognize that BSRR has a P/CF ratio of 8.26. 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. BSRR's P/CF compares to its industry's average P/CF of 18.93. BSRR's P/CF has been as high as 9.58 and as low as 6.58, with a median of 7.92, all within the past year.

These are just a handful of the figures considered in Sierra Bancorp's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that BSRR is an impressive value stock right now.


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