Is First United (FUNC) Stock 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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 stock to keep an eye on is First United (FUNC). FUNC is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 5.08. This compares to its industry's average Forward P/E of 8.75. Over the past year, FUNC's Forward P/E has been as high as 8.41 and as low as 4.97, with a median of 6.97.
Another notable valuation metric for FUNC is its P/B ratio of 0.87. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. FUNC's current P/B looks attractive when compared to its industry's average P/B of 1.59. Over the past 12 months, FUNC's P/B has been as high as 1.15 and as low as 0.82, with a median of 0.94.
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. FUNC has a P/S ratio of 1.55. This compares to its industry's average P/S of 2.69.
Finally, investors should note that FUNC has a P/CF ratio of 5.14. 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 stock's P/CF looks attractive against its industry's average P/CF of 12.82. Over the past year, FUNC's P/CF has been as high as 7.74 and as low as 5.02, with a median of 6.54.
Value investors will likely look at more than just these metrics, but the above data helps show that First United is likely undervalued currently. And when considering the strength of its earnings outlook, FUNC sticks out at as one of the market's strongest value stocks.
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