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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 Meridian Bank (MRBK). MRBK is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 8.19 right now. For comparison, its industry sports an average P/E of 11.14. MRBK's Forward P/E has been as high as 11.01 and as low as 5.45, with a median of 7.23, all within the past year.
We should also highlight that MRBK has a P/B ratio of 1.13. The P/B ratio pits a stock's market value against 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 1.36. Within the past 52 weeks, MRBK's P/B has been as high as 1.14 and as low as 0.58, with a median of 0.80.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by 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. MRBK has a P/S ratio of 0.96. This compares to its industry's average P/S of 1.91.
Finally, investors should note that MRBK has a P/CF ratio of 8.59. 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. This stock's P/CF looks attractive against its industry's average P/CF of 13.62. MRBK's P/CF has been as high as 11.06 and as low as 5.04, with a median of 7.31, all within the past year.
OFG Bancorp (OFG) may be another strong Banks - Northeast stock to add to your shortlist. OFG is a # 2 (Buy) stock with a Value grade of A.
OFG Bancorp also has a P/B ratio of 1.54 compared to its industry's price-to-book ratio of 1.36. Over the past year, its P/B ratio has been as high as 1.79, as low as 1.29, with a median of 1.51.