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, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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.
RBB Bancorp (RBB) is a stock many investors are watching right now. RBB is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 6.19 right now. For comparison, its industry sports an average P/E of 10.03. RBB's Forward P/E has been as high as 9.80 and as low as 6.04, with a median of 7.64, all within the past year.
Another valuation metric that we should highlight is RBB's P/B ratio of 0.87. 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 attractive against its industry's average P/B of 1.67. RBB's P/B has been as high as 1.20 and as low as 0.84, with a median of 1.01, over the past year.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by 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. RBB has a P/S ratio of 2.32. This compares to its industry's average P/S of 2.95.
Finally, investors should note that RBB has a P/CF ratio of 5.47. 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. RBB's current P/CF looks attractive when compared to its industry's average P/CF of 10.40. Within the past 12 months, RBB's P/CF has been as high as 9.04 and as low as 5.34, with a median of 6.80.
These figures are just a handful of the metrics value investors tend to look at, but they help show that RBB Bancorp is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, RBB feels like a great value stock at the moment.
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