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Is Eagle Bancorp Montana (EBMT) Stock Undervalued 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.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. 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 to watch right now is Eagle Bancorp Montana (EBMT - Free Report) . EBMT is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 7.53. This compares to its industry's average Forward P/E of 10.72. Over the past year, EBMT's Forward P/E has been as high as 9.74 and as low as 7.53, with a median of 8.70.

Another valuation metric that we should highlight is EBMT's P/B ratio of 0.89. 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 solid versus its industry's average P/B of 1.92. Within the past 52 weeks, EBMT's P/B has been as high as 1.10 and as low as 0.89, with a median of 0.98.

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. EBMT has a P/S ratio of 1.49. This compares to its industry's average P/S of 2.88.

Finally, we should also recognize that EBMT has a P/CF ratio of 6. 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. EBMT's current P/CF looks attractive when compared to its industry's average P/CF of 15.49. EBMT's P/CF has been as high as 6.92 and as low as 4.97, with a median of 5.65, all within the past year.

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


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