Are Investors Undervaluing Financial Institutions (FISI) 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.
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.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company to watch right now is Financial Institutions (FISI). FISI is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 7.59, which compares to its industry's average of 9.24. Over the past year, FISI's Forward P/E has been as high as 10.05 and as low as 7.06, with a median of 9.11.
Another valuation metric that we should highlight is FISI's P/B ratio of 0.97. 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 1.41. Over the past 12 months, FISI's P/B has been as high as 1.15 and as low as 0.94, with a median of 1.05.
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. FISI has a P/S ratio of 1.99. This compares to its industry's average P/S of 2.79.
Finally, we should also recognize that FISI has a P/CF ratio of 5. 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. FISI's P/CF compares to its industry's average P/CF of 13.43. Within the past 12 months, FISI's P/CF has been as high as 7.38 and as low as 4.86, with a median of 5.88.
These are just a handful of the figures considered in Financial Institutions'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 FISI is an impressive value stock right now.
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