Are Investors Undervaluing Orrstown Financial Services (ORRF) 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 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.
One company to watch right now is Orrstown Financial Services (ORRF). ORRF is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 7.24, while its industry has an average P/E of 8.45. Over the past year, ORRF's Forward P/E has been as high as 8.31 and as low as 5.10, with a median of 6.83.
We should also highlight that ORRF has a P/B ratio of 0.98. 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. ORRF's current P/B looks attractive when compared to its industry's average P/B of 1.14. ORRF's P/B has been as high as 1.36 and as low as 0.70, with a median of 1.08, over the past year.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's 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. ORRF has a P/S ratio of 1.52. This compares to its industry's average P/S of 1.76.
Finally, investors should note that ORRF has a P/CF ratio of 7.75. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 10.08. Within the past 12 months, ORRF's P/CF has been as high as 11.45 and as low as 5.56, with a median of 7.82.
These are only a few of the key metrics included in Orrstown Financial Services's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, ORRF looks like an impressive value stock at the moment.
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Orrstown Financial Services Inc (ORRF) : Free Stock Analysis Report
