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Are Investors Undervaluing Central Valley Community Bancorp (CVCY) 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.

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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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.

One stock to keep an eye on is Central Valley Community Bancorp (CVCY - Free Report) . CVCY is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 10.88, which compares to its industry's average of 13.57. Over the last 12 months, CVCY's Forward P/E has been as high as 15.34 and as low as 8.11, with a median of 12.89.

We also note that CVCY holds a PEG ratio of 1.63. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. CVCY's PEG compares to its industry's average PEG of 1.68. Over the last 12 months, CVCY's PEG has been as high as 1.71 and as low as 1.48, with a median of 1.59.

We should also highlight that CVCY has a P/B ratio of 0.86. The P/B is a method of comparing a stock's market value to 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 1.57. Over the past year, CVCY's P/B has been as high as 1.29 and as low as 0.64, with a median of 1.17.

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. CVCY has a P/S ratio of 2.13. This compares to its industry's average P/S of 2.31.

Finally, we should also recognize that CVCY has a P/CF ratio of 6.63. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering 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, CVCY's P/CF has been as high as 10.67 and as low as 5, with a median of 9.65.

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


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