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.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. 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 to watch right now is Metropolitan Bank Holding (MCB). MCB is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 9.23 right now. For comparison, its industry sports an average P/E of 10.27. Over the past 52 weeks, MCB's Forward P/E has been as high as 9.86 and as low as 6.39, with a median of 8.46.
Value investors also use the P/S ratio. The P/S ratio is calculated as price divided by sales. This is a preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. MCB has a P/S ratio of 1.63. This compares to its industry's average P/S of 1.95.
Finally, investors will want to recognize that MCB has a P/CF ratio of 14.31. 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 stock's P/CF looks attractive against its industry's average P/CF of 16.46. Within the past 12 months, MCB's P/CF has been as high as 14.77 and as low as 8.49, with a median of 12.74.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Metropolitan Bank Holding is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, MCB feels like a great value stock at the moment.
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Metropolitan Bank Holding Corp. (MCB): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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