Is Independent Bank (IBCP) a Great Value Stock 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 Independent Bank (IBCP). IBCP is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 9.22. This compares to its industry's average Forward P/E of 12.20. Over the past 52 weeks, IBCP's Forward P/E has been as high as 11.83 and as low as 4.81, with a median of 9.69.
Investors will also notice that IBCP has a PEG ratio of 1.34. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. IBCP's PEG compares to its industry's average PEG of 2.09.
Another valuation metric that we should highlight is IBCP's P/B ratio of 0.89. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. IBCP's current P/B looks attractive when compared to its industry's average P/B of 1.41. Over the past year, IBCP's P/B has been as high as 1.59 and as low as 0.62, with a median of 0.94.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. IBCP has a P/S ratio of 1.62. This compares to its industry's average P/S of 2.01.
Finally, investors will want to recognize that IBCP has a P/CF ratio of 6. 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. IBCP's current P/CF looks attractive when compared to its industry's average P/CF of 13.36. Over the past 52 weeks, IBCP's P/CF has been as high as 10.84 and as low as 4.18, with a median of 6.54.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Independent Bank is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, IBCP feels like a great 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.