Is FS Bancorp (FSBW) Stock Undervalued Right Now?
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 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.
FS Bancorp (FSBW) is a stock many investors are watching right now. FSBW is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 7.77. This compares to its industry's average Forward P/E of 10.20. FSBW's Forward P/E has been as high as 11.01 and as low as 7.77, with a median of 9.08, all within the past year.
Another valuation metric that we should highlight is FSBW's P/B ratio of 1.04. The P/B ratio is used to compare a stock's market value with 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 1.70. Over the past year, FSBW's P/B has been as high as 1.26 and as low as 0.97, with a median of 1.08.
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. FSBW has a P/S ratio of 1.76. This compares to its industry's average P/S of 2.79.
Finally, investors will want to recognize that FSBW has a P/CF ratio of 5.19. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. FSBW's P/CF compares to its industry's average P/CF of 10.65. Within the past 12 months, FSBW's P/CF has been as high as 5.62 and as low as 4.64, with a median of 5.21.
These figures are just a handful of the metrics value investors tend to look at, but they help show that FS Bancorp is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, FSBW feels like a great value stock at the moment.
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