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Should Value Investors Buy Bank OZK (OZK) Stock?

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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.

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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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 Bank OZK (OZK - Free Report) . OZK is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 7.93 right now. For comparison, its industry sports an average P/E of 9.65. Over the past year, OZK's Forward P/E has been as high as 8.78 and as low as 6.06, with a median of 7.42.

Finally, we should also recognize that OZK has a P/CF ratio of 7.12. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. OZK's P/CF compares to its industry's average P/CF of 15.85. Over the past year, OZK's P/CF has been as high as 7.39 and as low as 5.25, with a median of 6.47.

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


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