Are Investors Undervaluing 1st Source (SRCE) 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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company value investors might notice is 1st Source (SRCE). SRCE is currently holding a Zacks Rank #2 (Buy) and a Value grade of A.
Investors should also recognize that SRCE has a P/B ratio of 1.24. The P/B is a method of comparing a stock's market value to 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 1.91. SRCE's P/B has been as high as 1.40 and as low as 1.07, with a median of 1.24, over the past year.
Finally, our model also underscores that SRCE has a P/CF ratio of 10.31. 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 stock's P/CF looks attractive against its industry's average P/CF of 13.99. SRCE's P/CF has been as high as 11.36 and as low as 8.55, with a median of 10.06, all within the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that 1st Source is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, SRCE feels like a great value stock at the moment.
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This article originally published on Zacks Investment Research (zacks.com).
