Are Investors Undervaluing Customers Bancorp (CUBI) Right Now?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. 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 stock to keep an eye on is Customers Bancorp (CUBI). CUBI is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 6.48, which compares to its industry's average of 12.42. Over the last 12 months, CUBI's Forward P/E has been as high as 6.48 and as low as 2.98, with a median of 4.55.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. CUBI has a P/S ratio of 1.56. This compares to its industry's average P/S of 3.05.
Finally, investors will want to recognize that CUBI has a P/CF ratio of 5.77. 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 company's current P/CF looks solid when compared to its industry's average P/CF of 11. CUBI's P/CF has been as high as 5.77 and as low as 2.61, with a median of 3.55, all within the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that Customers Bancorp is likely undervalued currently. And when considering the strength of its earnings outlook, CUBI sticks out at as one of the market's strongest value stocks.
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