The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find 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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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.
Columbia Banking System (COLB) is a stock many investors are watching right now. COLB is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 8.59, while its industry has an average P/E of 10.48. Over the last 12 months, COLB's Forward P/E has been as high as 11.81 and as low as 7.59, with a median of 9.41.
Investors should also recognize that COLB has a P/B ratio of 1.03. 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. COLB's current P/B looks attractive when compared to its industry's average P/B of 1.32. Over the past year, COLB's P/B has been as high as 1.27 and as low as 0.83, with a median of 1.03.
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. COLB has a P/S ratio of 1.87. This compares to its industry's average P/S of 2.21.
Finally, our model also underscores that COLB has a P/CF ratio of 9.25. 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 10.65. COLB's P/CF has been as high as 11.97 and as low as 7.68, with a median of 9.38, all within the past year.
These are only a few of the key metrics included in Columbia Banking System'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, COLB looks like an impressive value stock at the moment.
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Columbia Banking System, Inc. (COLB): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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