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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One stock to keep an eye on is Business First Bancshares (BFST). BFST is currently sporting a Zacks Rank #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 8.38. This compares to its industry's average Forward P/E of 9.46. Over the last 12 months, BFST's Forward P/E has been as high as 11.60 and as low as 7.60, with a median of 9.20.
Investors should also recognize that BFST has a P/B ratio of 0.93. 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. This company's current P/B looks solid when compared to its industry's average P/B of 1.06. Over the past 12 months, BFST's P/B has been as high as 1.41 and as low as 0.85, with a median of 1.00.
Value investors also use the P/S ratio. The P/S ratio is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. BFST has a P/S ratio of 1.4. This compares to its industry's average P/S of 1.86.
Finally, investors should note that BFST has a P/CF ratio of 8.69. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. BFST's current P/CF looks attractive when compared to its industry's average P/CF of 15.77. Over the past 52 weeks, BFST's P/CF has been as high as 11.79 and as low as 8.23, with a median of 9.42.
These are only a few of the key metrics included in Business First Bancshares'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, BFST looks like an impressive value stock at the moment.
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Business First Bancshares, Inc. (BFST): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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