Are Investors Undervaluing Alerus Financial (ALRS) Right Now?
The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
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 stock to keep an eye on is Alerus Financial (ALRS). ALRS is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.
Another notable valuation metric for ALRS is its P/B ratio of 1.41. The P/B ratio pits a stock's market value against 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 3.84. Within the past 52 weeks, ALRS's P/B has been as high as 1.80 and as low as 1.32, with a median of 1.47.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by 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. ALRS has a P/S ratio of 2.09. This compares to its industry's average P/S of 2.22.
Finally, investors should note that ALRS has a P/CF ratio of 7.89. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 16.94. Over the past 52 weeks, ALRS's P/CF has been as high as 10.80 and as low as 7, with a median of 7.93.
Value investors will likely look at more than just these metrics, but the above data helps show that Alerus Financial is likely undervalued currently. And when considering the strength of its earnings outlook, ALRS sticks out at as one of the market's strongest value stocks.
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