Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore 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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company value investors might notice is First Western Financial, Inc. (MYFW). MYFW is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock is trading with P/E ratio of 7.90 right now. For comparison, its industry sports an average P/E of 12.85. Over the last 12 months, MYFW's Forward P/E has been as high as 14.25 and as low as 7.90, with a median of 10.71.
Another valuation metric that we should highlight is MYFW's P/B ratio of 0.83. 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. This stock's P/B looks attractive against its industry's average P/B of 2.26. Within the past 52 weeks, MYFW's P/B has been as high as 1.20 and as low as 0.83, with a median of 0.96.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. MYFW has a P/S ratio of 1.1. This compares to its industry's average P/S of 1.75.
Finally, investors should note that MYFW has a P/CF ratio of 9.10. 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. MYFW's P/CF compares to its industry's average P/CF of 13.84. Within the past 12 months, MYFW's P/CF has been as high as 13.56 and as low as 9.10, with a median of 12.20.
These are only a few of the key metrics included in First Western Financial, Inc.'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, MYFW looks like an impressive value stock at the moment.
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