Are Investors Undervaluing First Bank (FRBA) 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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
First Bank (FRBA) is a stock many investors are watching right now. FRBA is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 7.41. This compares to its industry's average Forward P/E of 8.77. FRBA's Forward P/E has been as high as 9.55 and as low as 5.38, with a median of 7.45, all within the past year.
We should also highlight that FRBA has a P/B ratio of 0.72. 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 attractive against its industry's average P/B of 1.10. Over the past year, FRBA's P/B has been as high as 0.85 and as low as 0.57, with a median of 0.72.
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. FRBA has a P/S ratio of 1.47. This compares to its industry's average P/S of 1.64.
Value investors will likely look at more than just these metrics, but the above data helps show that First Bank is likely undervalued currently. And when considering the strength of its earnings outlook, FRBA sticks out at as one of the market's strongest value stocks.
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First Bank (FRBA) : Free Stock Analysis Report
