Should Value Investors Buy CPB (CPF) Stock?
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
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 stock to keep an eye on is CPB (CPF). CPF is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock holds a P/E ratio of 8.29, while its industry has an average P/E of 9.44. Over the last 12 months, CPF's Forward P/E has been as high as 14.69 and as low as 7.92, with a median of 11.04.
Investors should also recognize that CPF has a P/B ratio of 1.28. 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 solid versus its industry's average P/B of 1.59. Over the past year, CPF's P/B has been as high as 1.58 and as low as 1.21, with a median of 1.39.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. CPF has a P/S ratio of 2.11. This compares to its industry's average P/S of 2.71.
Finally, investors will want to recognize that CPF has a P/CF ratio of 6.16. 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. CPF's current P/CF looks attractive when compared to its industry's average P/CF of 9.91. CPF's P/CF has been as high as 8.94 and as low as 5.89, with a median of 7.67, all within the past year.
FS Bancorp (FSBW) may be another strong Banks - West stock to add to your shortlist. FSBW is a # 2 (Buy) stock with a Value grade of A.
FS Bancorp also has a P/B ratio of 0.95 compared to its industry's price-to-book ratio of 1.59. Over the past year, its P/B ratio has been as high as 1.26, as low as 0.95, with a median of 1.06.
These are only a few of the key metrics included in CPB and FS Bancorp strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, CPF and FSBW look like an impressive value stock at the moment.
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