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Should Value Investors Buy Old Second Bancorp (OSBC) Stock?

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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.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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.

Old Second Bancorp (OSBC - Free Report) is a stock many investors are watching right now. OSBC is currently holding a Zacks Rank #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 8.75 right now. For comparison, its industry sports an average P/E of 10.66. Over the past year, OSBC's Forward P/E has been as high as 10.39 and as low as 7.60, with a median of 8.93.

We should also highlight that OSBC has a P/B ratio of 1.15. The P/B is a method of comparing a stock's market value to 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 2.07. Within the past 52 weeks, OSBC's P/B has been as high as 1.30 and as low as 0.94, with a median of 1.17.

Finally, investors should note that OSBC has a P/CF ratio of 8.56. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. OSBC's P/CF compares to its industry's average P/CF of 15.23. Within the past 12 months, OSBC's P/CF has been as high as 9.42 and as low as 6.96, with a median of 8.21.

These are just a handful of the figures considered in Old Second Bancorp'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 OSBC is an impressive value stock right now.


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