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.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One company to watch right now is PCB Bancorp (PCB). PCB is currently sporting a Zacks Rank #1 (Strong Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 8.52. This compares to its industry's average Forward P/E of 13.02. Over the past year, PCB's Forward P/E has been as high as 11.40 and as low as 7.72, with a median of 9.05.
Investors should also recognize that PCB has a P/B ratio of 1. 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. This company's current P/B looks solid when compared to its industry's average P/B of 2.02. Over the past year, PCB's P/B has been as high as 1.14 and as low as 0.80, 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. PCB has a P/S ratio of 1.58. This compares to its industry's average P/S of 2.45.
Finally, investors will want to recognize that PCB has a P/CF ratio of 8.54. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 18.85. PCB's P/CF has been as high as 10.91 and as low as 7.29, with a median of 8.95, all within the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that PCB Bancorp is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, PCB feels like a great value stock at the moment.
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PCB Bancorp (PCB): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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