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Should Value Investors Buy RBB Bancorp (RBB) Stock?
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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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.
One company to watch right now is RBB Bancorp (RBB - Free Report) . RBB is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 6.46. This compares to its industry's average Forward P/E of 9.91. Over the past 52 weeks, RBB's Forward P/E has been as high as 9.80 and as low as 5.93, with a median of 6.76.
We should also highlight that RBB has a P/B ratio of 0.93. 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. This stock's P/B looks attractive against its industry's average P/B of 1.53. Over the past year, RBB's P/B has been as high as 1.20 and as low as 0.83, with a median of 0.93.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. RBB has a P/S ratio of 2.35. This compares to its industry's average P/S of 2.84.
Finally, our model also underscores that RBB has a P/CF ratio of 5.71. 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. RBB's current P/CF looks attractive when compared to its industry's average P/CF of 9.27. Within the past 12 months, RBB's P/CF has been as high as 8.13 and as low as 5.12, with a median of 5.88.
These figures are just a handful of the metrics value investors tend to look at, but they help show that RBB Bancorp is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, RBB feels like a great value stock at the moment.