Are Investors Undervaluing ChoiceOne Financial Services (COFS) 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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One stock to keep an eye on is ChoiceOne Financial Services (COFS). COFS is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 8.54 right now. For comparison, its industry sports an average P/E of 12.96. Over the last 12 months, COFS's Forward P/E has been as high as 11.04 and as low as 5.66, with a median of 8.88.

Another valuation metric that we should highlight is COFS's P/B ratio of 0.95. Investors use the P/B ratio to look at a stock's market value versus 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 2.09. Over the past year, COFS's P/B has been as high as 1.32 and as low as 0.68, with a median of 1.01.

Finally, our model also underscores that COFS has a P/CF ratio of 5.86. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 13.20. Within the past 12 months, COFS's P/CF has been as high as 6.82 and as low as 3.48, with a median of 5.31.

These are only a few of the key metrics included in ChoiceOne Financial Services's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, COFS looks like an impressive value stock at the moment.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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