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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.
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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One company to watch right now is MainStreet Bank (MNSB). MNSB is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A.
We should also highlight that MNSB has a P/B ratio of 0.66. The P/B ratio is used to compare a stock's market value with 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 0.88. Over the past 12 months, MNSB's P/B has been as high as 0.78 and as low as 0.59, with a median of 0.69.
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. MNSB has a P/S ratio of 0.86. This compares to its industry's average P/S of 1.64.
These are only a few of the key metrics included in MainStreet Bank'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, MNSB looks like an impressive value stock at the moment.
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MainStreet Bank (MNSB) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).