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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader 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.
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 OP Bancorp (OPBK). OPBK is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 7.84. This compares to its industry's average Forward P/E of 13.86. Over the last 12 months, OPBK's Forward P/E has been as high as 12.35 and as low as 6.22, with a median of 8.25.
Another notable valuation metric for OPBK is its P/B ratio of 1. 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. This company's current P/B looks solid when compared to its industry's average P/B of 2.03. Over the past 12 months, OPBK's P/B has been as high as 1.34 and as low as 0.72, with a median of 0.94.
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. OPBK has a P/S ratio of 1.33. This compares to its industry's average P/S of 2.24.
Finally, our model also underscores that OPBK has a P/CF ratio of 8.02. 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. OPBK's P/CF compares to its industry's average P/CF of 20.04. OPBK's P/CF has been as high as 10.31 and as low as 5.52, with a median of 7.30, all within the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that OP Bancorp is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, OPBK feels like a great value stock at the moment.
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OP Bancorp (OPBK): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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