Are Investors Undervaluing 1st Constitution Bancorp (FCCY) Right Now?
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 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.
1st Constitution Bancorp (FCCY) is a stock many investors are watching right now. FCCY is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.
We also note that FCCY holds a PEG ratio of 1.40. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. FCCY's PEG compares to its industry's average PEG of 1.65. Within the past year, FCCY's PEG has been as high as 1.42 and as low as 1.39, with a median of 1.40.
Investors should also recognize that FCCY has a P/B ratio of 0.70. 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 stock's P/B looks solid versus its industry's average P/B of 0.92. Over the past 12 months, FCCY's P/B has been as high as 1.37 and as low as 0.58, with a median of 0.76.
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 prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. FCCY has a P/S ratio of 1.65. This compares to its industry's average P/S of 1.9.
Finally, we should also recognize that FCCY has a P/CF ratio of 7.36. 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. FCCY's P/CF compares to its industry's average P/CF of 11.35. Over the past 52 weeks, FCCY's P/CF has been as high as 13.73 and as low as 6.27, with a median of 8.17.
These are just a handful of the figures considered in 1st Constitution Bancorp'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 FCCY is an impressive value stock right now.
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