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.
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.
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 Eagle Bancorp Montana (EBMT). EBMT is currently sporting a Zacks Rank #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 8.91. This compares to its industry's average Forward P/E of 10.10. Over the last 12 months, EBMT's Forward P/E has been as high as 13.92 and as low as 8.85, with a median of 10.30.
Another notable valuation metric for EBMT is its P/B ratio of 0.71. 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 stock's P/B looks solid versus its industry's average P/B of 1.97. EBMT's P/B has been as high as 0.83 and as low as 0.60, with a median of 0.74, 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. This is a preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. EBMT has a P/S ratio of 1. This compares to its industry's average P/S of 1.92.
Finally, our model also underscores that EBMT has a P/CF ratio of 5.53. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 14.09. EBMT's P/CF has been as high as 7.56 and as low as 5.50, with a median of 6.53, all within the past year.
These are just a handful of the figures considered in Eagle Bancorp Montana'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 EBMT is an impressive value stock right now.
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Eagle Bancorp Montana, Inc. (EBMT): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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