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Are Investors Undervaluing MainStreet Bank (MNSB) Right Now?

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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.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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 company value investors might notice is MainStreet Bank (MNSB - Free Report) . MNSB is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 10.44, which compares to its industry's average of 12.67. MNSB's Forward P/E has been as high as 12.26 and as low as 9.21, with a median of 11.06, all within the past year.

We should also highlight that MNSB has a P/B ratio of 1.18. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 1.78. Over the past 12 months, MNSB's P/B has been as high as 1.25 and as low as 0.92, with a median of 1.14.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. MNSB has a P/S ratio of 2.61. This compares to its industry's average P/S of 3.01.

Finally, investors will want to recognize that MNSB has a P/CF ratio of 6.69. 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 17.81. Over the past 52 weeks, MNSB's P/CF has been as high as 9.22 and as low as 6.12, with a median of 6.83.

These figures are just a handful of the metrics value investors tend to look at, but they help show that MainStreet Bank is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, MNSB feels like a great value stock at the moment.


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