Back to top

Image: Bigstock

Is Summit Financial Group (SMMF) a Great Value Stock Right Now?

Read MoreHide Full Article

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.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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 Summit Financial Group (SMMF - Free Report) . SMMF is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 6.98, while its industry has an average P/E of 10.34. Over the last 12 months, SMMF's Forward P/E has been as high as 9.56 and as low as 6.98, with a median of 8.21.

Investors should also recognize that SMMF has a P/B ratio of 1.01. The P/B is a method of comparing a stock's market value to 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 1.64. Over the past year, SMMF's P/B has been as high as 1.18 and as low as 0.92, with a median of 1.07.

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. SMMF has a P/S ratio of 2.21. This compares to its industry's average P/S of 3.01.

Finally, investors should note that SMMF has a P/CF ratio of 5.96. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 10.81. Over the past 52 weeks, SMMF's P/CF has been as high as 7.81 and as low as 5.74, with a median of 6.60.

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

In-Depth Zacks Research for the Tickers Above

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

Summit Financial Group, Inc. (SMMF) - free report >>

Published in