Here at Zacks, we focus on our proven ranking system, which emphasizes earnings estimates and estimated revisions to find winning stocks. But we also understand that investors are developing their own strategies, so we are constantly looking at the latest trends in value, growth and momentum to find strong companies for our readers.
Given these trends, value investing is clearly one of the most preferred ways to find strong stocks in any kind of market. Value investors use basic analysis and traditional valuation measurements to find stocks that they believe are being undervalued by the market in general.
In addition to Zacks Rank, investors looking for stocks with specific characteristics can use our Style Scores system. Of course, value investors will be most interested in the system’s “Value” category. Stocks with A ratings for value and high Zacks rank are among the most available stocks at all times.
One company value investors may notice is Bridge Bancorp (DCOM – Free report). DCOM currently holds a Zacks rank of # 2 (Buy) and a value class of A. The stock has a forward P / E ratio of 9.97. This compares with the industry average Forward P / E of 12.65. Over the past 12 months, DCOM’s Forward P / E has been as high as 11.53 and as low as 6.35 with a median of 7.90.
Value investors also use the P / S ratio. The P / S ratio is calculated as price divided by sales. Some people prefer this measurement because sales are harder to manipulate on an income statement. This means that it can be a truer performance indicator. DCOM has a P / S ratio of 2.61. This compares with the industry average P / S of 2.62.
Finally, investors should note that DCOM has a P / CF ratio of 10.70. This data point takes into account a company’s operational cash flow and is often used to find companies that are undervalued when considering their solid cash prospects. DCOMs P / CF is comparable to the industry average P / CF of 11. Within the last 12 months, DCOMs P / CF has been as high as 11.37 and as low as 5.74 with a median of 7.18.
These are just a few of the key metrics included in Bridge Bancorp’s strong Value rating, but they help show that the stock is likely to be undervalued right now. Taking into account the strength of its earnings prospects, DCOM looks like an impressive security at the moment.
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