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Are These Finance Stocks Undervalued Right Now?

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to...

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This story originally appeared on Zacks

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.

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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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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 Capital Bancorp (CBNK). CBNK is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 10.66, which compares to its industry's average of 13.17. CBNK's Forward P/E has been as high as 13.32 and as low as 8.39, with a median of 10.60, all within 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 prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. CBNK has a P/S ratio of 2.11. This compares to its industry's average P/S of 2.98.

Finally, we should also recognize that CBNK has a P/CF ratio of 9.35. 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 17.85. Over the past 52 weeks, CBNK's P/CF has been as high as 10.10 and as low as 6.62, with a median of 8.28.

CF Bankshares (CFBK) may be another strong Banks - Northeast stock to add to your shortlist. CFBK is a # 1 (Strong Buy) stock with a Value grade of A.

CF Bankshares also has a P/B ratio of 0.94 compared to its industry's price-to-book ratio of 1.66. Over the past year, its P/B ratio has been as high as 1.02, as low as 0.73, with a median of 0.89.

These are just a handful of the figures considered in Capital Bancorp and CF Bankshares'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 CBNK and CFBK is an impressive value stock right now.



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Capital Bancorp, Inc. (CBNK): Free Stock Analysis Report

 

CF Bankshares Inc. (CFBK): Free Stock Analysis Report

 

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