Should Value Investors Buy RBB Bancorp (RBB) Stock?
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...
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 the latest value, growth, and momentum trends to underscore strong picks.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
RBB Bancorp (RBB) is a stock many investors are watching right now. RBB 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 9.51, which compares to its industry's average of 16.63. RBB's Forward P/E has been as high as 9.83 and as low as 7.26, with a median of 8.84, all within the past year.
Investors should also recognize that RBB has a P/B ratio of 1.11. 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. RBB's current P/B looks attractive when compared to its industry's average P/B of 2.19. Over the past 12 months, RBB's P/B has been as high as 1.15 and as low as 0.72, with a median of 1.05.
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. RBB has a P/S ratio of 3.18. This compares to its industry's average P/S of 3.45.
Finally, our model also underscores that RBB has a P/CF ratio of 7.97. 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. RBB's current P/CF looks attractive when compared to its industry's average P/CF of 17.91. Over the past 52 weeks, RBB's P/CF has been as high as 11.69 and as low as 7.31, with a median of 8.63.
These figures are just a handful of the metrics value investors tend to look at, but they help show that RBB Bancorp is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, RBB feels like a great value stock at the moment.
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