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.
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 Business Financial Services (FBIZ). FBIZ is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 10.16, which compares to its industry's average of 10.92. Over the past year, FBIZ's Forward P/E has been as high as 11.81 and as low as 9.32, with a median of 10.32.
We also note that FBIZ holds a PEG ratio of 1.27. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. FBIZ's industry currently sports an average PEG of 1.45. FBIZ's PEG has been as high as 1.48 and as low as 1.17, with a median of 1.29, all within the past year.
We should also highlight that FBIZ has a P/B ratio of 1.09. 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. FBIZ's current P/B looks attractive when compared to its industry's average P/B of 1.89. Within the past 52 weeks, FBIZ's P/B has been as high as 1.21 and as low as 0.94, with a median of 1.06.
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 prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. FBIZ has a P/S ratio of 1.72. This compares to its industry's average P/S of 2.98.
Finally, we should also recognize that FBIZ has a P/CF ratio of 8.50. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 11.81. FBIZ's P/CF has been as high as 13.70 and as low as 7.92, with a median of 9.97, all within the past year.
These are just a handful of the figures considered in First Business Financial Services's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that FBIZ is an impressive value stock right now.
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First Business Financial Services, Inc. (FBIZ) : Free Stock Analysis Report
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