Is HomeStreet (HMST) Stock Undervalued Right Now?
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.
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.
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 company value investors might notice is HomeStreet (HMST). HMST is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.
Another notable valuation metric for HMST is its P/B ratio of 0.38. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. HMST's current P/B looks attractive when compared to its industry's average P/B of 0.92. Within the past 52 weeks, HMST's P/B has been as high as 0.99 and as low as 0.17, with a median of 0.33.
Finally, investors should note that HMST has a P/CF ratio of 5.20. 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. This stock's P/CF looks attractive against its industry's average P/CF of 5.43. Over the past year, HMST's P/CF has been as high as 6.69 and as low as 1.46, with a median of 3.31.
Investors could also keep in mind OceanFirst Financial (OCFC), an Financial - Savings and Loan stock with a Zacks Rank of # 2 (Buy) and Value grade of A.
Additionally, OceanFirst Financial has a P/B ratio of 0.64 while its industry's price-to-book ratio sits at 0.92. For OCFC, this valuation metric has been as high as 0.93, as low as 0.45, with a median of 0.61 over the past year.
These are only a few of the key metrics included in HomeStreet and OceanFirst Financial strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, HMST and OCFC look like an impressive value stock at the moment.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
HomeStreet, Inc. (HMST) : Free Stock Analysis Report
OceanFirst Financial Corp. (OCFC) : Free Stock Analysis Report
