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Is BanColombia (CIB) Stock Undervalued 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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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.

One company to watch right now is BanColombia (CIB - Free Report) . CIB is currently holding a Zacks Rank #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 7.13, which compares to its industry's average of 10.26. Over the past year, CIB's Forward P/E has been as high as 7.19 and as low as 5.05, with a median of 6.47.

Value investors also use the P/S ratio. The P/S ratio is calculated as price divided by sales. This is a preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. CIB has a P/S ratio of 1.22. This compares to its industry's average P/S of 1.7.

Finally, we should also recognize that CIB has a P/CF ratio of 7.22. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 17.33. Within the past 12 months, CIB's P/CF has been as high as 7.27 and as low as 3.95, with a median of 5.75.

Value investors will likely look at more than just these metrics, but the above data helps show that BanColombia is likely undervalued currently. And when considering the strength of its earnings outlook, CIB sticks out as one of the market's strongest value stocks.


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