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Is Independent Bank (IBCP) Stock Undervalued Right Now?

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The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One company to watch right now is Independent Bank (IBCP - Free Report) . IBCP is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock holds a P/E ratio of 9.26, while its industry has an average P/E of 11.42. Over the past 52 weeks, IBCP's Forward P/E has been as high as 12.16 and as low as 8.25, with a median of 9.89.

Investors should also recognize that IBCP has a P/B ratio of 1.16. The P/B ratio is used to compare a stock's market value with 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 2.01. Over the past year, IBCP's P/B has been as high as 1.38 and as low as 1.08, with a median of 1.24.

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. IBCP has a P/S ratio of 2.19. This compares to its industry's average P/S of 3.08.

Finally, we should also recognize that IBCP has a P/CF ratio of 6.24. 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. IBCP's current P/CF looks attractive when compared to its industry's average P/CF of 20.91. IBCP's P/CF has been as high as 7.39 and as low as 5.26, with a median of 6.13, all within the past year.

These are only a few of the key metrics included in Independent Bank's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, IBCP looks like an impressive value stock at the moment.


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