While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
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 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.
One company value investors might notice is OP Bancorp (OPBK). OPBK is currently holding a Zacks Rank #1 (Strong Buy) and a Value grade of A. The stock is trading with a P/E ratio of 8.02, which compares to its industry's average of 12.41. Over the past year, OPBK's Forward P/E has been as high as 12.35 and as low as 6.22, with a median of 7.72.
Investors should also recognize that OPBK has a P/B ratio of 1.02. 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. OPBK's current P/B looks attractive when compared to its industry's average P/B of 1.86. Within the past 52 weeks, OPBK's P/B has been as high as 1.34 and as low as 0.75, 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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. OPBK has a P/S ratio of 1.22. This compares to its industry's average P/S of 2.12.
Finally, our model also underscores that OPBK has a P/CF ratio of 8.10. 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. OPBK's current P/CF looks attractive when compared to its industry's average P/CF of 18.25. OPBK's P/CF has been as high as 10.31 and as low as 5.98, with a median of 7.51, all within the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that OP Bancorp is likely undervalued currently. And when considering the strength of its earnings outlook, OPBK sticks out as one of the market's strongest value stocks.
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OP Bancorp (OPBK): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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