The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 company to watch right now is BankUnited (BKU). BKU is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.
Another notable valuation metric for BKU is its P/B ratio of 0.89. 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 1.28. Within the past 52 weeks, BKU's P/B has been as high as 1.15 and as low as 0.76, with a median of 0.98.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's 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. BKU has a P/S ratio of 1.25. This compares to its industry's average P/S of 1.46.
Finally, our model also underscores that BKU has a P/CF ratio of 9.03. 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. BKU's P/CF compares to its industry's average P/CF of 10.59. Over the past year, BKU's P/CF has been as high as 13.99 and as low as 7.91, with a median of 10.91.
Value investors will likely look at more than just these metrics, but the above data helps show that BankUnited is likely undervalued currently. And when considering the strength of its earnings outlook, BKU sticks out at as one of the market's strongest value stocks.
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BankUnited, Inc. (BKU): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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