Is BanColombia (CIB) Stock Undervalued Right Now?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
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 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.
BanColombia (CIB) is a stock many investors are watching right now. CIB is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock holds a P/E ratio of 5.65, while its industry has an average P/E of 7.96. Over the past 52 weeks, CIB's Forward P/E has been as high as 11.60 and as low as 5.65, with a median of 8.39.
Investors will also notice that CIB has a PEG ratio of 0.33. 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. CIB's PEG compares to its industry's average PEG of 0.49. Over the past 52 weeks, CIB's PEG has been as high as 0.63 and as low as 0.33, with a median of 0.45.
Another valuation metric that we should highlight is CIB's P/B ratio of 0.88. The P/B ratio is used to compare a stock's market value with 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 1.26. Over the past 12 months, CIB's P/B has been as high as 1.14 and as low as 0.72, with a median of 0.86.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. CIB has a P/S ratio of 1.34. This compares to its industry's average P/S of 1.38.
Finally, our model also underscores that CIB has a P/CF ratio of 4.56. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 12.10. Within the past 12 months, CIB's P/CF has been as high as 19.31 and as low as 4.50, with a median of 7.98.
Value investors will likely look at more than just these metrics, but the above data helps show that BanColombia is likely undervalued currently. And when considering the strength of its earnings outlook, CIB sticks out at as one of the market's strongest value stocks.
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