Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. 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 value investors might notice is Flagstar Bancorp (FBC). FBC is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 9.03. This compares to its industry's average Forward P/E of 9.71. FBC's Forward P/E has been as high as 9.21 and as low as 4.56, with a median of 7.59, all within the past year.
We should also highlight that FBC has a 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. FBC's current P/B looks attractive when compared to its industry's average P/B of 0.93. Over the past year, FBC's P/B has been as high as 1.12 and as low as 0.65, with a median of 0.89.
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. FBC has a P/S ratio of 1.41. This compares to its industry's average P/S of 2.71.
Finally, we should also recognize that FBC has a P/CF ratio of 5.21. 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 9.37. Over the past 52 weeks, FBC's P/CF has been as high as 5.31 and as low as 3.39, with a median of 3.87.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Flagstar Bancorp is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, FBC feels like a great value stock at the moment.
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Flagstar Bancorp, Inc. (FBC) : Free Stock Analysis Report
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