Should Value Investors Buy ConnectOne Bancorp (CNOB) Stock?
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.
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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One stock to keep an eye on is ConnectOne Bancorp (CNOB). CNOB is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock holds a P/E ratio of 7.98, while its industry has an average P/E of 10.18. Over the last 12 months, CNOB's Forward P/E has been as high as 11.38 and as low as 3.96, with a median of 9.01.
We should also highlight that CNOB has a P/B ratio of 0.64. 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 company's current P/B looks solid when compared to its industry's average P/B of 0.92. CNOB's P/B has been as high as 1.30 and as low as 0.46, with a median of 1.06, over the past year.
Finally, we should also recognize that CNOB has a P/CF ratio of 8.35. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. CNOB's current P/CF looks attractive when compared to its industry's average P/CF of 11.35. Within the past 12 months, CNOB's P/CF has been as high as 12.46 and as low as 4.42, with a median of 10.02.
These are just a handful of the figures considered in ConnectOne Bancorp'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 CNOB is an impressive value stock right now.
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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.