In This Article:
The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
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.
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 company value investors might notice is Red River Bancshares (RRBI). RRBI 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 10.40 right now. For comparison, its industry sports an average P/E of 14.41. Over the past 52 weeks, RRBI's Forward P/E has been as high as 12.86 and as low as 9.31, with a median of 10.70.
We should also highlight that RRBI has a P/B ratio of 1.10. 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 1.97. Within the past 52 weeks, RRBI's P/B has been as high as 1.30 and as low as 1.03, with a median of 1.15.
Finally, our model also underscores that RRBI has a P/CF ratio of 10.01. 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. RRBI's current P/CF looks attractive when compared to its industry's average P/CF of 16.69. Over the past 52 weeks, RRBI's P/CF has been as high as 11.59 and as low as 8.67, with a median of 9.75.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Red River Bancshares is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, RRBI feels like a great value stock at the moment.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report