Are Investors Undervaluing Midland States Bancorp, Inc. (MSBI) Right Now?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 stock to keep an eye on is Midland States Bancorp, Inc. (MSBI). MSBI is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 9.50. This compares to its industry's average Forward P/E of 10.20. Over the past 52 weeks, MSBI's Forward P/E has been as high as 11.65 and as low as 5.17, with a median of 9.38.
Investors will also notice that MSBI has a PEG ratio of 1.37. 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. MSBI's industry currently sports an average PEG of 1.69. Within the past year, MSBI's PEG has been as high as 1.41 and as low as 1.29, with a median of 1.34.
Investors should also recognize that MSBI has a P/B ratio of 0.53. The P/B ratio pits a stock's market value against 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 year, MSBI's P/B has been as high as 1.10 and as low as 0.48, with a median of 0.97.
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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. MSBI has a P/S ratio of 1.05. This compares to its industry's average P/S of 1.81.
Finally, investors will want to recognize that MSBI has a P/CF ratio of 5.66. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 11.35. Within the past 12 months, MSBI's P/CF has been as high as 9.08 and as low as 4.39, with a median of 7.94.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Midland States Bancorp, Inc. Is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, MSBI feels like a great value stock at the moment.
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