The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
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.
One stock to keep an eye on is OP Bancorp (OPBK). OPBK is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 7.33. This compares to its industry's average Forward P/E of 13.95. OPBK's Forward P/E has been as high as 12.35 and as low as 5.88, with a median of 8.25, all within the past year.
Investors should also recognize that OPBK has a P/B ratio of 1.01. 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. OPBK's current P/B looks attractive when compared to its industry's average P/B of 2. OPBK's P/B has been as high as 1.34 and as low as 0.69, with a median of 0.93, over the past year.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. 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 1.31. This compares to its industry's average P/S of 2.16.
Finally, our model also underscores that OPBK has a P/CF ratio of 7.92. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 15.86. Within the past 12 months, OPBK's P/CF has been as high as 10.31 and as low as 5.06, with a median of 7.05.
These are only a few of the key metrics included in OP Bancorp's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, OPBK looks like an impressive value stock at the moment.
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OP Bancorp (OPBK) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
