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Should Value Investors Buy FS Bancorp (FSBW) Stock?

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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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

FS Bancorp (FSBW - Free Report) is a stock many investors are watching right now. FSBW is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 8.69, which compares to its industry's average of 10.54. FSBW's Forward P/E has been as high as 11.01 and as low as 8.04, with a median of 9.66, all within the past year.

Another notable valuation metric for FSBW is its P/B ratio of 1.01. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 1.71. FSBW's P/B has been as high as 1.26 and as low as 0.92, with a median of 1.10, over the past year.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. FSBW has a P/S ratio of 1.86. This compares to its industry's average P/S of 2.87.

Finally, investors should note that FSBW has a P/CF ratio of 5.29. 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. FSBW's P/CF compares to its industry's average P/CF of 10.96. Over the past year, FSBW's P/CF has been as high as 5.62 and as low as 4.64, with a median of 5.15.

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


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