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Are Investors Undervaluing Independent Bank (IBCP) 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.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. 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.

Independent Bank (IBCP - Free Report) is a stock many investors are watching right now. IBCP is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 7.87, while its industry has an average P/E of 10.33. Over the past year, IBCP's Forward P/E has been as high as 12.16 and as low as 7.87, with a median of 9.67.

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 solid versus its industry's average P/B of 1.88. 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 1.96. This compares to its industry's average P/S of 2.84.

Finally, investors will want to recognize that IBCP has a P/CF ratio of 5.89. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. IBCP's current P/CF looks attractive when compared to its industry's average P/CF of 15.42. Within the past 12 months, IBCP's P/CF has been as high as 7.39 and as low as 5.26, with a median of 6.15.

These are just a handful of the figures considered in Independent Bank'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 IBCP is an impressive value stock right now.


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