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Is FS Bancorp (FSBW) Stock Undervalued Right Now?

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·3 min read
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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, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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.

FS Bancorp (FSBW) is a stock many investors are watching right now. FSBW is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 10.05, while its industry has an average P/E of 15.13. FSBW's Forward P/E has been as high as 11.62 and as low as 8.13, with a median of 10.08, all within the past year.

We should also highlight that FSBW has a P/B ratio of 1.13. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. FSBW's current P/B looks attractive when compared to its industry's average P/B of 2.07. FSBW's P/B has been as high as 1.35 and as low as 0.99, with a median of 1.19, over the past year.

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. FSBW has a P/S ratio of 2.03. This compares to its industry's average P/S of 3.44.

Finally, investors should note that FSBW has a P/CF ratio of 5.21. 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 16.94. Within the past 12 months, FSBW's P/CF has been as high as 6.03 and as low as 4.43, with a median of 5.01.

These are just a handful of the figures considered in FS Bancorp'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 FSBW is an impressive value stock right now.


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