Should Value Investors Buy Independent Bank (IBCP) 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.
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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company value investors might notice is Independent Bank (IBCP). IBCP is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 11.28, while its industry has an average P/E of 13.51. IBCP's Forward P/E has been as high as 11.83 and as low as 6.86, with a median of 9.55, all within the past year.
Investors should also recognize that IBCP has a P/B ratio of 1.33. 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 company's current P/B looks solid when compared to its industry's average P/B of 1.41. IBCP's P/B has been as high as 1.37 and as low as 0.74, with a median of 0.96, 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. IBCP has a P/S ratio of 2.34. This compares to its industry's average P/S of 2.91.
Finally, our model also underscores that IBCP has a P/CF ratio of 8. 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. Within the past 12 months, IBCP's P/CF has been as high as 8.26 and as low as 4.58, with a median of 6.36.
These are only a few of the key metrics included in Independent Bank'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, IBCP looks like an impressive value stock at the moment.
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Independent Bank Corporation (IBCP) : Free Stock Analysis Report
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