Are Investors Undervaluing Financial Institutions (FISI) 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.
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.
Financial Institutions (FISI) is a stock many investors are watching right now. FISI is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 9.80 right now. For comparison, its industry sports an average P/E of 10.26. Over the past 52 weeks, FISI's Forward P/E has been as high as 14.41 and as low as 5.16, with a median of 10.41.
Another notable valuation metric for FISI is its P/B ratio of 0.62. 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 attractive against its industry's average P/B of 0.92. FISI's P/B has been as high as 1.28 and as low as 0.54, with a median of 1.14, over the past year.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's 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. FISI has a P/S ratio of 1.25. This compares to its industry's average P/S of 1.78.
Finally, investors should note that FISI has a P/CF ratio of 5.08. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. FISI's P/CF compares to its industry's average P/CF of 11.35. Over the past 52 weeks, FISI's P/CF has been as high as 9.62 and as low as 3.88, with a median of 8.49.
These are just a handful of the figures considered in Financial Institutions'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 FISI is an impressive value stock right now.
Click to get this free report
Financial Institutions, Inc. (FISI): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.