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Should Value Investors Buy First Guaranty Bancshares (FGBI) Stock?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
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.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
First Guaranty Bancshares (FGBI - Free Report) is a stock many investors are watching right now. FGBI is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 11.39 right now. For comparison, its industry sports an average P/E of 11.40. Over the last 12 months, FGBI's Forward P/E has been as high as 24.66 and as low as 9.91, with a median of 14.11.
Finally, we should also recognize that FGBI has a P/CF ratio of 9.66. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 16.32. Within the past 12 months, FGBI's P/CF has been as high as 11.59 and as low as 4.75, with a median of 8.66.
These are just a handful of the figures considered in First Guaranty Bancshares'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 FGBI is an impressive value stock right now.