Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 CNB Financial (CCNE). CCNE is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 7.28. This compares to its industry's average Forward P/E of 9.52. CCNE's Forward P/E has been as high as 13.81 and as low as 7.27, with a median of 9.63, all within the past year.
Another notable valuation metric for CCNE is its P/B ratio of 0.84. The P/B ratio is used to compare a stock's market value with 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 1.02. Over the past year, CCNE's P/B has been as high as 1.12 and as low as 0.75, with a median of 0.91.
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 preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. CCNE has a P/S ratio of 1.26. This compares to its industry's average P/S of 1.78.
Finally, our model also underscores that CCNE has a P/CF ratio of 8.16. 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 stock's P/CF looks attractive against its industry's average P/CF of 14.79. Within the past 12 months, CCNE's P/CF has been as high as 10.61 and as low as 7.39, with a median of 8.59.
Value investors will likely look at more than just these metrics, but the above data helps show that CNB Financial is likely undervalued currently. And when considering the strength of its earnings outlook, CCNE sticks out as one of the market's strongest value stocks.
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CNB Financial Corporation (CCNE): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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