Is Central Valley Community Bancorp (CVCY) a Great Value Stock Right Now?
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. 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.
Central Valley Community Bancorp (CVCY) is a stock many investors are watching right now. CVCY is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 11.58, while its industry has an average P/E of 13.55. Over the past year, CVCY's Forward P/E has been as high as 15.34 and as low as 8.11, with a median of 12.89.
CVCY is also sporting a PEG ratio of 1.63. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock'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 1.58.
Another valuation metric that we should highlight is CVCY's P/B ratio of 0.90. 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 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 1.18.
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 2.23. This compares to its industry's average P/S of 2.25.
Finally, we should also recognize that CVCY has a P/CF ratio of 6.96. 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. CVCY's P/CF compares to its industry's average P/CF of 11.93. Within the past 12 months, CVCY's P/CF has been as high as 10.67 and as low as 5, with a median of 9.68.
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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