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Is Independent Bank (IBCP) Stock Undervalued Right Now?

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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.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

Independent Bank (IBCP - Free Report) is a stock many investors are watching right now. IBCP is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 8.23. This compares to its industry's average Forward P/E of 9.96. Over the last 12 months, IBCP's Forward P/E has been as high as 12.16 and as low as 7.24, with a median of 9.67.

Another valuation metric that we should highlight is IBCP's P/B ratio of 1.21. 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 1.99. Over the past year, IBCP's P/B has been as high as 1.38 and as low as 1.07, with a median of 1.21.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. IBCP has a P/S ratio of 2.01. This compares to its industry's average P/S of 2.83.

Finally, investors should note that IBCP has a P/CF ratio of 6.20. 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. IBCP's P/CF compares to its industry's average P/CF of 14.91. Over the past 52 weeks, IBCP's P/CF has been as high as 7.39 and as low as 5.31, with a median of 6.13.

If you're looking for another solid Banks - Midwest value stock, take a look at Wintrust Financial (WTFC - Free Report) . WTFC is a # 2 (Buy) stock with a Value score of A.

Wintrust Financial is trading at a forward earnings multiple of 10.18 at the moment, with a PEG ratio of 0.60. This compares to its industry's average P/E of 9.96 and average PEG ratio of 0.94.


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