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.
Meridian Bank (MRBK) is a stock many investors are watching right now. MRBK is currently sporting a Zacks Rank #2 (Buy) and an A for Value. The stock holds a P/E ratio of 7.55, while its industry has an average P/E of 9.21. Over the last 12 months, MRBK's Forward P/E has been as high as 11.01 and as low as 6.32, with a median of 7.70.
We should also highlight that MRBK has a P/B ratio of 1.01. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. MRBK's current P/B looks attractive when compared to its industry's average P/B of 1.07. MRBK's P/B has been as high as 1.14 and as low as 0.74, with a median of 0.92, over the past year.
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. MRBK has a P/S ratio of 0.9. This compares to its industry's average P/S of 1.89.
Finally, investors should note that MRBK has a P/CF ratio of 7.82. 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. MRBK's P/CF compares to its industry's average P/CF of 12.14. MRBK's P/CF has been as high as 11.06 and as low as 6.12, with a median of 7.57, all within the past year.
These are just a handful of the figures considered in Meridian Bank's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that MRBK is an impressive value stock right now.
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Meridian Bank (MRBK): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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