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Is Essa Bancorp (ESSA) Stock Undervalued 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 use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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 Essa Bancorp (ESSA - Free Report) . ESSA is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.

Another notable valuation metric for ESSA is its P/B ratio of 0.81. 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 company's current P/B looks solid when compared to its industry's average P/B of 1. ESSA's P/B has been as high as 1.06 and as low as 0.62, with a median of 0.96, over the past year.

Finally, investors should note that ESSA has a P/CF ratio of 8.67. 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. ESSA's current P/CF looks attractive when compared to its industry's average P/CF of 10.48. ESSA's P/CF has been as high as 11.69 and as low as 6.72, with a median of 10.38, all within the past year.

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


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