Is Old Second Bancorp (OSBC) Stock Undervalued 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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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.
Old Second Bancorp (OSBC) is a stock many investors are watching right now. OSBC is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.
We also note that OSBC holds a PEG ratio of 1.45. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. OSBC's PEG compares to its industry's average PEG of 2.19. OSBC's PEG has been as high as 1.49 and as low as 1.33, with a median of 1.40, all within the past year.
We should also highlight that OSBC has a P/B ratio of 0.95. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. OSBC's current P/B looks attractive when compared to its industry's average P/B of 1.41. OSBC's P/B has been as high as 1.54 and as low as 0.67, with a median of 1.34, over the past year.
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 prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. OSBC has a P/S ratio of 1.69. This compares to its industry's average P/S of 1.79.
Finally, investors will want to recognize that OSBC has a P/CF ratio of 6.99. 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 company's current P/CF looks solid when compared to its industry's average P/CF of 13.36. Over the past year, OSBC's P/CF has been as high as 9.76 and as low as 4.27, with a median of 8.54.
These are just a handful of the figures considered in Old Second Bancorp'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 OSBC is an impressive value stock right now.
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