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Are Investors Undervaluing Regional Management (RM) Right Now?

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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.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. 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 to watch right now is Regional Management (RM - Free Report) . RM is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 3.50 right now. For comparison, its industry sports an average P/E of 8.23. Over the past year, RM's Forward P/E has been as high as 8.60 and as low as 2.57, with a median of 7.01.

We should also highlight that RM has a P/B ratio of 0.54. 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 stock's P/B looks solid versus its industry's average P/B of 0.90. Over the past 12 months, RM's P/B has been as high as 1.32 and as low as 0.38, with a median of 1.04.

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. RM has a P/S ratio of 0.53. This compares to its industry's average P/S of 0.86.

Finally, investors will want to recognize that RM has a P/CF ratio of 3. 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. RM's P/CF compares to its industry's average P/CF of 5.05. Over the past year, RM's P/CF has been as high as 7.92 and as low as 2.13, with a median of 6.76.

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


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