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.
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 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.
Byline Bancorp (BY) is a stock many investors are watching right now. BY is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.
Investors should also recognize that BY has a P/B ratio of 1.01. 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 1.40. Over the past 12 months, BY's P/B has been as high as 1.32 and as low as 1.01, with a median of 1.19.
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. BY has a P/S ratio of 2.32. This compares to its industry's average P/S of 2.66.
Finally, our model also underscores that BY has a P/CF ratio of 7.57. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 14.29. BY's P/CF has been as high as 10.74 and as low as 7.57, with a median of 8.93, all within the past year.
If you're looking for another solid Banks - Northeast value stock, take a look at Financial Institutions (FISI). FISI is a # 2 (Buy) stock with a Value score of A.
Furthermore, Financial Institutions holds a P/B ratio of 0.91 and its industry's price-to-book ratio is 1.40. FISI's P/B has been as high as 1.11, as low as 0.90, with a median of 1.03 over the past 12 months.
Value investors will likely look at more than just these metrics, but the above data helps show that Byline Bancorp and Financial Institutions are likely undervalued currently. And when considering the strength of its earnings outlook, BY and FISI sticks out as one of the market's strongest value stocks.
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