While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
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.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One company to watch right now is Shore Bancshares (SHBI). SHBI is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 8.39. This compares to its industry's average Forward P/E of 9.35. Over the past 52 weeks, SHBI's Forward P/E has been as high as 12.57 and as low as 6.86, with a median of 9.79.
Another notable valuation metric for SHBI is its P/B ratio of 0.87. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. SHBI's current P/B looks attractive when compared to its industry's average P/B of 0.95. Over the past 12 months, SHBI's P/B has been as high as 1.09 and as low as 0.68, with a median of 0.88.
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. SHBI has a P/S ratio of 1.44. This compares to its industry's average P/S of 1.76.
Finally, investors will want to recognize that SHBI has a P/CF ratio of 9.50. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 15.12. Over the past year, SHBI's P/CF has been as high as 13.94 and as low as 7.80, with a median of 10.77.
These are just a handful of the figures considered in Shore Bancshares'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 SHBI is an impressive value stock right now.
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Shore Bancshares Inc (SHBI): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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