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, 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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company to watch right now is PCB Bancorp (PCB). PCB is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 8.52, while its industry has an average P/E of 12.44. Over the past year, PCB's Forward P/E has been as high as 11.40 and as low as 7.72, with a median of 9.05.
Investors should also recognize that PCB has a P/B ratio of 1. 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. PCB's current P/B looks attractive when compared to its industry's average P/B of 1.86. Within the past 52 weeks, PCB's P/B has been as high as 1.14 and as low as 0.80, with a median of 0.96.
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. PCB has a P/S ratio of 1.49. This compares to its industry's average P/S of 2.22.
Finally, investors will want to recognize that PCB has a P/CF ratio of 8.54. 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 18.24. PCB's P/CF has been as high as 10.91 and as low as 7.29, with a median of 8.95, all within the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that PCB Bancorp is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, PCB feels like a great value stock at the moment.
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PCB Bancorp (PCB): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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