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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 Chemung Financial Corp (CHMG). CHMG is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 8.25. This compares to its industry's average Forward P/E of 10.28. Over the last 12 months, CHMG's Forward P/E has been as high as 10.44 and as low as 7.34, with a median of 9.05.
Another notable valuation metric for CHMG is its P/B ratio of 0.98. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. CHMG's current P/B looks attractive when compared to its industry's average P/B of 1.71. Over the past 12 months, CHMG's P/B has been as high as 1.19 and as low as 0.85, with a median of 1.06.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. CHMG has a P/S ratio of 1.53. This compares to its industry's average P/S of 1.96.
Finally, investors will want to recognize that CHMG has a P/CF ratio of 8.15. 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. CHMG's P/CF compares to its industry's average P/CF of 15.07. Over the past 52 weeks, CHMG's P/CF has been as high as 10.13 and as low as 6.85, with a median of 8.21.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Chemung Financial Corp is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, CHMG feels like a great value stock at the moment.
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Chemung Financial Corp (CHMG): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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