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Are Investors Undervaluing Alerus Financial (ALRS) Right Now?

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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.

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 Alerus Financial (ALRS - Free Report) . ALRS is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 8.97, which compares to its industry's average of 18.52. Over the last 12 months, ALRS's Forward P/E has been as high as 19.71 and as low as 7.50, with a median of 10.28.

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. ALRS has a P/S ratio of 1.5. This compares to its industry's average P/S of 1.81.

Finally, investors will want to recognize that ALRS has a P/CF ratio of 12.70. 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. ALRS's P/CF compares to its industry's average P/CF of 20.88. ALRS's P/CF has been as high as 41.87 and as low as 9.72, with a median of 19.21, all within the past year.

These are only a few of the key metrics included in Alerus Financial's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, ALRS looks like an impressive value stock at the moment.


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