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Is Shore Bancshares (SHBI) Stock Undervalued Right Now?

Zacks

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.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. 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 Shore Bancshares (SHBI). SHBI is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.


Another valuation metric that we should highlight is SHBI’s P/B ratio of 0.57. 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 1.47. Within the past 52 weeks, SHBI’s P/B has been as high as 1.17 and as low as 0.51, with a median of 1.06.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. SHBI has a P/S ratio of 1.54. This compares to its industry’s average P/S of 1.82.

Finally, our model also underscores that SHBI has a P/CF ratio of 6.06. 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. This company’s current P/CF looks solid when compared to its industry’s average P/CF of 12.86. Over the past year, SHBI’s P/CF has been as high as 11.44 and as low as 5.14, with a median of 7.40.

Value investors will likely look at more than just these metrics, but the above data helps show that Shore Bancshares is likely undervalued currently. And when considering the strength of its earnings outlook, SHBI sticks out at as one of the market’s strongest value stocks.


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