Is Financial Institutions (FISI) 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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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 Financial Institutions (FISI). FISI is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.
We should also highlight that FISI has a P/B ratio of 1.16. 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 stock's P/B looks solid versus its industry's average P/B of 1.48. Within the past 52 weeks, FISI's P/B has been as high as 1.49 and as low as 1.13, with a median of 1.37.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. FISI has a P/S ratio of 2.37. This compares to its industry's average P/S of 2.98.
Finally, our model also underscores that FISI 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 company's current P/CF looks solid when compared to its industry's average P/CF of 14.51. FISI's P/CF has been as high as 11.90 and as low as 8.09, with a median of 10.74, all within the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that Financial Institutions is likely undervalued currently. And when considering the strength of its earnings outlook, FISI sticks out at as one of the market's strongest value stocks.
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