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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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.
One stock to keep an eye on is Capital Bancorp (CBNK). CBNK is currently sporting a Zacks Rank #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 9.13, while its industry has an average P/E of 10.69. CBNK's Forward P/E has been as high as 12.04 and as low as 8.01, with a median of 9.16, all within the past year.
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. CBNK has a P/S ratio of 1.83. This compares to its industry's average P/S of 2.3.
Finally, investors will want to recognize that CBNK has a P/CF ratio of 11.64. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. CBNK's P/CF compares to its industry's average P/CF of 13.15. CBNK's P/CF has been as high as 16.26 and as low as 10.12, with a median of 12.63, all within the past year.
These are only a few of the key metrics included in Capital Bancorp's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, CBNK looks like an impressive value stock at the moment.
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Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.9% per year. So be sure to give these hand picked 7 your immediate attention.Â
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