Are These Finance Stocks Undervalued Right Now?
The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
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.
One company to watch right now is First United (FUNC). FUNC is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 6.60, while its industry has an average P/E of 11.83. Over the past year, FUNC's Forward P/E has been as high as 8.41 and as low as 6, with a median of 7.16.
Another notable valuation metric for FUNC is its P/B ratio of 1.09. Investors use the P/B ratio to look at a stock's market value versus 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 1.81. FUNC's P/B has been as high as 1.18 and as low as 0.82, with a median of 0.96, over the past year.
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. FUNC has a P/S ratio of 1.83. This compares to its industry's average P/S of 2.85.
Finally, investors should note that FUNC has a P/CF ratio of 7.10. 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. FUNC's current P/CF looks attractive when compared to its industry's average P/CF of 14.66. FUNC's P/CF has been as high as 8.94 and as low as 5.80, with a median of 7.10, all within the past year.
Another great Banks - Northeast stock you could consider is Salisbury Bancorp (SAL), which is a # 2 (Buy) stock with a Value Score of A.
Additionally, Salisbury Bancorp has a P/B ratio of 1.18 while its industry's price-to-book ratio sits at 1.81. For SAL, this valuation metric has been as high as 1.28, as low as 0.92, with a median of 1.10 over the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that First United and Salisbury Bancorp are likely undervalued currently. And when considering the strength of its earnings outlook, FUNC and SAL sticks out as one of the market's strongest value stocks.
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First United Corporation (FUNC) : Free Stock Analysis Report
Salisbury Bancorp, Inc. (SAL) : Free Stock Analysis Report
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