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.
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 value investors might notice is Home Bancorp (HBCP). HBCP is currently sporting a Zacks Rank #2 (Buy) and an A for Value.
Investors should also recognize that HBCP has a P/B ratio of 1.07. The P/B ratio is used to compare a stock's market value with 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 1.68. HBCP's P/B has been as high as 1.09 and as low as 0.83, with a median of 0.99, over the past year.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. HBCP has a P/S ratio of 2.03. This compares to its industry's average P/S of 2.04.
Finally, our model also underscores that HBCP has a P/CF ratio of 9.08. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 14.53. Within the past 12 months, HBCP's P/CF has been as high as 9.65 and as low as 7.42, with a median of 8.81.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Home Bancorp is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, HBCP feels like a great value stock at the moment.
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Home Bancorp, Inc. (HBCP): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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