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Are Investors Undervaluing Chemung Financial (CHMG) Right Now?

Zacks Equity Research
Hexcel (HXL) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.

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.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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 Chemung Financial (CHMG). CHMG is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 10.86, which compares to its industry's average of 11.10. Over the last 12 months, CHMG's Forward P/E has been as high as 12.07 and as low as 9.99, with a median of 11.23.

Investors should also recognize that CHMG has a P/B ratio of 1.29. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 1.60. Within the past 52 weeks, CHMG's P/B has been as high as 1.68 and as low as 1.18, with a median of 1.39.

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. CHMG has a P/S ratio of 2.32. This compares to its industry's average P/S of 2.91.

Finally, investors should note that CHMG has a P/CF ratio of 11.75. 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. CHMG's P/CF compares to its industry's average P/CF of 12.80. Within the past 12 months, CHMG's P/CF has been as high as 17.98 and as low as 10.78, with a median of 15.22.

These are just a handful of the figures considered in Chemung Financial'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 CHMG is an impressive value stock right now.


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