Is Capital Bancorp (CBNK) a Great Value Stock 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.
One company value investors might notice is Capital Bancorp (CBNK). CBNK is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's 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. CBNK has a P/S ratio of 2. This compares to its industry's average P/S of 2.79.
Finally, investors will want to recognize that CBNK has a P/CF ratio of 8.32. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 15.72. Within the past 12 months, CBNK's P/CF has been as high as 9.61 and as low as 6.66, with a median of 8.16.
Value investors will likely look at more than just these metrics, but the above data helps show that Capital Bancorp is likely undervalued currently. And when considering the strength of its earnings outlook, CBNK sticks out at as one of the market's strongest value stocks.
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