Are Investors Undervaluing Capital Bancorp (CBNK) 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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One company value investors might notice is Capital Bancorp (CBNK). CBNK is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value.
Another notable valuation metric for CBNK is its P/B ratio of 1.60. Investors use the P/B ratio to look at a stock's market value versus 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 1.62. Over the past year, CBNK's P/B has been as high as 2.04 and as low as 1.46, with a median of 1.75.
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. CBNK has a P/S ratio of 1.83. This compares to its industry's average P/S of 2.76.
Finally, we should also recognize that CBNK has a P/CF ratio of 7.31. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 13.04. Over the past 52 weeks, CBNK's P/CF has been as high as 9.61 and as low as 6.65, with a median of 8.27.
Value investors will likely look at more than just these metrics, but the above data helps show that Capital Bancorp is likely undervalued currently. And when considering the strength of its earnings outlook, CBNK sticks out at as one of the market's strongest value stocks.
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
Capital Bancorp, Inc. (CBNK) : Free Stock Analysis Report
To read this article on Zacks.com click here.
