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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
Central Pacific Financial (CPF - Free Report) is a stock many investors are watching right now. CPF is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 11.75, while its industry has an average P/E of 13.54. Over the last 12 months, CPF's Forward P/E has been as high as 15.96 and as low as 8.27, with a median of 14.08.
Another valuation metric that we should highlight is CPF's P/B ratio of 0.75. The P/B ratio pits a stock's market value against 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 1.57. Over the past 12 months, CPF's P/B has been as high as 1.72 and as low as 0.68, with a median of 1.57.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. CPF has a P/S ratio of 1.69. This compares to its industry's average P/S of 1.99.
Finally, we should also recognize that CPF has a P/CF ratio of 5.75. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 11.93. Over the past year, CPF's P/CF has been as high as 11.20 and as low as 4.72, with a median of 10.44.
These are just a handful of the figures considered in Central Pacific Financial'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 CPF is an impressive value stock right now.