Should Value Investors Buy Orrstown Financial Services (ORRF) 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, value investing is easily one of the most popular ways to find great stocks in any market environment. 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 value investors might notice is Orrstown Financial Services (ORRF). ORRF is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 6.56. This compares to its industry's average Forward P/E of 8.21. Over the past 52 weeks, ORRF's Forward P/E has been as high as 8.31 and as low as 5.10, with a median of 6.85.
Investors should also recognize that ORRF has a P/B ratio of 0.89. 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. ORRF's current P/B looks attractive when compared to its industry's average P/B of 1.15. Within the past 52 weeks, ORRF's P/B has been as high as 1.36 and as low as 0.70, with a median of 1.06.
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. ORRF has a P/S ratio of 1.34. This compares to its industry's average P/S of 1.75.
Finally, our model also underscores that ORRF has a P/CF ratio of 6.98. 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. ORRF's P/CF compares to its industry's average P/CF of 9.88. Over the past year, ORRF's P/CF has been as high as 11.45 and as low as 5.56, with a median of 7.76.
Value investors will likely look at more than just these metrics, but the above data helps show that Orrstown Financial Services is likely undervalued currently. And when considering the strength of its earnings outlook, ORRF sticks out at as one of the market's strongest value stocks.
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Orrstown Financial Services Inc (ORRF) : Free Stock Analysis Report
