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Should Value Investors Buy MainStreet Bank (MNSB) Stock?

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The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. 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.

MainStreet Bank (MNSB - Free Report) is a stock many investors are watching right now. MNSB is currently holding a Zacks Rank #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 9.93, while its industry has an average P/E of 10.74. Over the last 12 months, MNSB's Forward P/E has been as high as 21.54 and as low as 9.26, with a median of 14.09.

Investors should also recognize that MNSB has a P/B ratio of 0.89. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 1.38. Within the past 52 weeks, MNSB's P/B has been as high as 0.95 and as low as 0.65, with a median of 0.73.

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. MNSB has a P/S ratio of 1.32. This compares to its industry's average P/S of 2.29.

These figures are just a handful of the metrics value investors tend to look at, but they help show that MainStreet Bank is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, MNSB feels like a great value stock at the moment.

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