The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find 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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 OP Bancorp (OPBK). OPBK 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 5.83. This compares to its industry's average Forward P/E of 10.35. OPBK's Forward P/E has been as high as 7.19 and as low as 4.98, with a median of 6.22, all within the past year.
Another notable valuation metric for OPBK is its P/B ratio of 0.70. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 1.52. Over the past 12 months, OPBK's P/B has been as high as 1.07 and as low as 0.62, with a median of 0.78.
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. OPBK has a P/S ratio of 0.98. This compares to its industry's average P/S of 1.55.
Finally, our model also underscores that OPBK has a P/CF ratio of 4.24. 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. OPBK's current P/CF looks attractive when compared to its industry's average P/CF of 12.23. Within the past 12 months, OPBK's P/CF has been as high as 5.53 and as low as 3.27, with a median of 4.28.
Value investors will likely look at more than just these metrics, but the above data helps show that OP Bancorp is likely undervalued currently. And when considering the strength of its earnings outlook, OPBK sticks out at as one of the market's strongest value stocks.
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