Is Chemung Financial (CHMG) 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.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One company to watch right now is Chemung Financial (CHMG). CHMG is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 10.92, which compares to its industry's average of 12.04. Over the past 52 weeks, CHMG's Forward P/E has been as high as 13.17 and as low as 8.47, with a median of 10.48.
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. CHMG has a P/S ratio of 2.28. This compares to its industry's average P/S of 2.99.
Finally, our model also underscores that CHMG has a P/CF ratio of 7.98. 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 company's current P/CF looks solid when compared to its industry's average P/CF of 11. CHMG's P/CF has been as high as 8.29 and as low as 5.76, with a median of 6.83, all within the past year.
These are only a few of the key metrics included in Chemung Financial'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, CHMG looks like an impressive value stock at the moment.
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