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.
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 value investors might notice is CNB Financial (CCNE). CCNE is currently sporting a Zacks Rank #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 7.98 right now. For comparison, its industry sports an average P/E of 9.90. Over the last 12 months, CCNE's Forward P/E has been as high as 13.81 and as low as 7.32, with a median of 9.71.
Another valuation metric that we should highlight is CCNE's P/B ratio of 0.88. 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. CCNE's current P/B looks attractive when compared to its industry's average P/B of 1.04. Over the past 12 months, CCNE's P/B has been as high as 1.12 and as low as 0.75, with a median of 0.92.
Value investors also use the P/S ratio. The P/S ratio is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. CCNE has a P/S ratio of 1.37. This compares to its industry's average P/S of 1.86.
Finally, investors should note that CCNE has a P/CF ratio of 8.64. 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 stock's P/CF looks attractive against its industry's average P/CF of 16.41. CCNE's P/CF has been as high as 10.61 and as low as 6.97, with a median of 8.50, all within the past year.
These are just a handful of the figures considered in CNB Financial'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 CCNE is an impressive value stock right now.
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CNB Financial Corporation (CCNE): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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