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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. 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 PeapackGladstone Financial (PGC). PGC is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 9.17. This compares to its industry's average Forward P/E of 9.84. Over the last 12 months, PGC's Forward P/E has been as high as 17.68 and as low as 7.84, with a median of 9.67.
Another notable valuation metric for PGC is its P/B ratio of 0.82. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 1.17. Over the past 12 months, PGC's P/B has been as high as 1.09 and as low as 0.70, with a median of 0.83.
Value investors also use the P/S ratio. The P/S ratio is calculated as price divided by 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. PGC has a P/S ratio of 1.28. This compares to its industry's average P/S of 1.97.
Finally, investors will want to recognize that PGC has a P/CF ratio of 11.99. 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. PGC's current P/CF looks attractive when compared to its industry's average P/CF of 13.04. Within the past 12 months, PGC's P/CF has been as high as 14.97 and as low as 10.12, with a median of 11.97.
These are just a handful of the figures considered in PeapackGladstone Financial'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 PGC is an impressive value stock right now.
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Peapack-Gladstone Financial Corporation (PGC): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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