At Zacks, we focus on our proven ranking system, which emphasizes earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, which is why we constantly examine the latest trends in value, growth and momentum to find solid companies for our readers.
Of these, no stock market trend is perhaps more popular than value investing, which is a strategy that has proven effective in all sorts of market environments. Value investors use proven metrics and fundamental analysis to find companies they believe are undervalued at their current stock price level.
Zacks developed the innovative Style Scores system to highlight stocks with specific characteristics. For example, value investors will be interested in stocks with good ratings in the “Value” category. When paired with a high Zacks rating, “A” ratings in the Value category are among the strongest value stocks in the market today.
Pathward Financial Inc. (CASH – Free report) is a stock that many investors are watching right now. CASH currently sports a Zacks rank of No. 2 (buy), along with a value rating of A. The stock has a forward P/E ratio of 7.67. This compares to its industry average Forward P/E of 9.39. Over the past 12 months, the CASH Forward P/E has been as high as 13.24 and as low as 5.71, with a median of 7.65.
Value investors also value the P/S ratio, which is calculated by simply dividing a stock’s price by the company’s sales. Some people prefer this measure because sales are more difficult to manipulate on an income statement. This means it could be a truer performance indicator. CASH has a P/S ratio of 2.04. That compares to its industry average P/S of 2.5.
Finally, it should also be recognized that CASH has a P/CF ratio of 5.61. This measure takes into account a company’s operating cash flow and can be used to find undervalued stocks based on their strong cash flow outlook. CASH’s current P/CF looks attractive compared to its sector average P/CF of 8.92. CASH’s P/CF has been as high as 10.15 and as low as 4.29, with a median of 5.63, all over the past year.
Investors might also keep in mind Riverview Bancorp (RVSB – Free report) a financial stock – savings and loan with a Zacks rank of #2 (buy) and a value rating of A.
Additionally, Riverview Bancorp has a P/E ratio of 1.14 and its sector’s price-to-book ratio is 0.85. RVSB’s P/B has been as high as 1.14, as low as 0.86, with a median of 1.02 over the past 12 months.
These numbers are just a few of the value indicators that investors tend to look at, but they help show that Pathward Financial Inc. and Riverview Bancorp are likely undervalued right now. Given this, along with the strength of its earnings outlook, CASH and RVSB appear to be a high value stock at the moment.