Should Value Investors Buy PeapackGladstone Financial (PGC) Stock?

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.

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.

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 stock to keep an eye on is PeapackGladstone Financial (PGC). PGC is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 9.17, which compares to its industry's average of 10.19. PGC's Forward P/E has been as high as 17.68 and as low as 7.84, with a median of 9.67, all within the past year.

Another valuation metric that we should highlight is PGC's 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 attractive against its industry's average P/B of 1.22. PGC's P/B has been as high as 1.09 and as low as 0.70, with a median of 0.83, over the past year.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. 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 1.39. This compares to its industry's average P/S of 2.07.

Finally, our model also underscores 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 12.98. Over the past year, PGC's P/CF has been as high as 14.97 and as low as 10.12, with a median of 11.97.

These figures are just a handful of the metrics value investors tend to look at, but they help show that PeapackGladstone Financial is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, PGC feels like a great value stock at the moment.

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This article originally published on Zacks Investment Research (zacks.com).

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