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Is MainStreet Bank (MNSB) a Great Value Stock 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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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.

One company value investors might notice is MainStreet Bank (MNSB - Free Report) . MNSB is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 8.34 right now. For comparison, its industry sports an average P/E of 9.34. Over the last 12 months, MNSB's Forward P/E has been as high as 12.02 and as low as 7.68, with a median of 10.18.

We should also highlight that MNSB has a P/B ratio of 1.16. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. MNSB's current P/B looks attractive when compared to its industry's average P/B of 1.77. Over the past year, MNSB's P/B has been as high as 1.25 and as low as 1.05, with a median of 1.16.

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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. MNSB has a P/S ratio of 2.5. This compares to its industry's average P/S of 2.82.

Finally, our model also underscores that MNSB has a P/CF ratio of 7.90. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. MNSB's P/CF compares to its industry's average P/CF of 16.84. Over the past 52 weeks, MNSB's P/CF has been as high as 7.96 and as low as 6.15, with a median of 7.26.

Value investors will likely look at more than just these metrics, but the above data helps show that MainStreet Bank is likely undervalued currently. And when considering the strength of its earnings outlook, MNSB sticks out at as one of the market's strongest value stocks.


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