Is Central Valley Community Bancorp (CVCY) 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.
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). CVCY is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 7.38 right now. For comparison, its industry sports an average P/E of 9.57. CVCY's Forward P/E has been as high as 12.14 and as low as 6.60, with a median of 10.67, all within the past year.
Another valuation metric that we should highlight is CVCY's P/B ratio of 1.23. 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 attractive against its industry's average P/B of 1.60. Over the past 12 months, CVCY's P/B has been as high as 1.45 and as low as 0.90, with a median of 1.09.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. CVCY has a P/S ratio of 2.55. This compares to its industry's average P/S of 2.84.
Finally, we should also recognize that CVCY has a P/CF ratio of 6.02. 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 9.97. CVCY's P/CF has been as high as 7.93 and as low as 4.87, with a median of 7.18, all within the past year.
These are only a few of the key metrics included in Central Valley Community Bancorp's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, CVCY looks like an impressive value stock at the moment.
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