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Is FS Bancorp (FSBW) Stock Undervalued Right Now?

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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

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.

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 stock to keep an eye on is FS Bancorp (FSBW - Free Report) . FSBW is currently sporting a Zacks Rank #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 9.73 right now. For comparison, its industry sports an average P/E of 10.78. Over the past year, FSBW's Forward P/E has been as high as 10.94 and as low as 8.27, with a median of 9.31.

Another valuation metric that we should highlight is FSBW's P/B ratio of 1.07. The P/B ratio pits a stock's market value against 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 1.32. FSBW's P/B has been as high as 1.31 and as low as 0.93, with a median of 1.09, 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 1.51. This compares to its industry's average P/S of 2.21.

Finally, investors will want to recognize that FSBW has a P/CF ratio of 7.27. 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 stock's P/CF looks attractive against its industry's average P/CF of 10.84. Within the past 12 months, FSBW's P/CF has been as high as 7.90 and as low as 6.22, with a median of 6.91.

These are only a few of the key metrics included in FS Bancorp'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, FSBW looks like an impressive value stock at the moment.


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