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Are Investors Undervaluing First Guaranty Bancshares (FGBI) 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.

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.

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.

First Guaranty Bancshares (FGBI - Free Report) is a stock many investors are watching right now. FGBI is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 8.56. This compares to its industry's average Forward P/E of 9.86. Over the past 52 weeks, FGBI's Forward P/E has been as high as 10.92 and as low as 7.91, with a median of 8.79.

Investors should also recognize that FGBI has a P/B ratio of 1.28. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. FGBI's current P/B looks attractive when compared to its industry's average P/B of 1.60. Within the past 52 weeks, FGBI's P/B has been as high as 1.37 and as low as 0.94, with a median of 1.12.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. FGBI has a P/S ratio of 1.93. This compares to its industry's average P/S of 2.97.

Finally, investors will want to recognize that FGBI has a P/CF ratio of 7.67. 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. FGBI's current P/CF looks attractive when compared to its industry's average P/CF of 10.53. Within the past 12 months, FGBI's P/CF has been as high as 8.16 and as low as 6.03, with a median of 6.85.

Another great Banks - Southeast stock you could consider is Summit Financial Group (SMMF - Free Report) , which is a # 2 (Buy) stock with a Value Score of A.

Additionally, Summit Financial Group has a P/B ratio of 1.12 while its industry's price-to-book ratio sits at 1.60. For SMMF, this valuation metric has been as high as 1.18, as low as 0.92, with a median of 1.07 over the past year.

These are just a handful of the figures considered in First Guaranty Bancshares and Summit Financial Group'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 FGBI and SMMF is an impressive value stock right now.


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