Should Value Investors Buy Chemung Financial Corp (CHMG) Stock?
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, 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.
Chemung Financial Corp (CHMG) is a stock many investors are watching right now. CHMG is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 8.62. This compares to its industry's average Forward P/E of 10.03. Over the last 12 months, CHMG's Forward P/E has been as high as 10.61 and as low as 8.37, with a median of 9.82.
Investors should also recognize that CHMG has a P/B ratio of 1.13. The P/B is a method of comparing a stock's market value to 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 1.79. Over the past 12 months, CHMG's P/B has been as high as 1.20 and as low as 0.98, with a median of 1.04.
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. CHMG has a P/S ratio of 2.2. This compares to its industry's average P/S of 2.98.
Finally, we should also recognize that CHMG has a P/CF ratio of 5.88. 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. This stock's P/CF looks attractive against its industry's average P/CF of 11.22. Within the past 12 months, CHMG's P/CF has been as high as 7.13 and as low as 5.72, with a median of 6.25.
Investors could also keep in mind Customers Bancorp (CUBI), an Banks - Southeast stock with a Zacks Rank of # 2 (Buy) and Value grade of A.
Customers Bancorp also has a P/B ratio of 1.09 compared to its industry's price-to-book ratio of 1.79. Over the past year, its P/B ratio has been as high as 1.97, as low as 1, with a median of 1.31.
These are just a handful of the figures considered in Chemung Financial Corp and Customers 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 CHMG and CUBI is an impressive value stock right now.
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Chemung Financial Corp (CHMG) : Free Stock Analysis Report
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