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.
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 Midland States Bancorp (MSBI). MSBI is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 6.29 right now. For comparison, its industry sports an average P/E of 9.49. Over the past 52 weeks, MSBI's Forward P/E has been as high as 11.26 and as low as 5.82, with a median of 8.16.
We should also highlight that MSBI has a P/B ratio of 0.50. Investors use the P/B ratio to look at a stock's market value versus 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 0.98. Over the past year, MSBI's P/B has been as high as 0.85 and as low as 0.46, with a median of 0.69.
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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. MSBI has a P/S ratio of 0.75. This compares to its industry's average P/S of 1.74.
Value investors will likely look at more than just these metrics, but the above data helps show that Midland States Bancorp is likely undervalued currently. And when considering the strength of its earnings outlook, MSBI sticks out at as one of the market's strongest value stocks.
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Midland States Bancorp, Inc. (MSBI): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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