Are Investors Undervaluing Chemung Financial Corp (CHMG) 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, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. 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 company value investors might notice is Chemung Financial Corp (CHMG). CHMG is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 7.06. This compares to its industry's average Forward P/E of 8.92. CHMG's Forward P/E has been as high as 10.61 and as low as 7.06, with a median of 9.71, all within the past year.
Another notable valuation metric for CHMG is its P/B ratio of 1.12. The P/B ratio is used to compare a stock's market value with 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 1.77. Within the past 52 weeks, CHMG's P/B has been as high as 1.29 and as low as 1, with a median of 1.08.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. CHMG has a P/S ratio of 2.08. This compares to its industry's average P/S of 2.78.
Finally, investors will want to recognize that CHMG has a P/CF ratio of 5.44. 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 11.44. CHMG's P/CF has been as high as 6.68 and as low as 5.37, with a median of 6.11, all within the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that Chemung Financial Corp is likely undervalued currently. And when considering the strength of its earnings outlook, CHMG sticks out at as one of the market's strongest value stocks.
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