Should Value Investors Buy OP Bancorp (OPBK) Stock?

While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One company value investors might notice is OP Bancorp (OPBK). OPBK is currently holding a Zacks Rank #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 8.02, which compares to its industry's average of 12.56. Over the past 52 weeks, OPBK's Forward P/E has been as high as 12.35 and as low as 6.22, with a median of 7.72.

Investors should also recognize that OPBK has a P/B ratio of 1.02. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 2.05. Over the past 12 months, OPBK's P/B has been as high as 1.34 and as low as 0.75, with a median of 0.96.

Value investors also use the P/S ratio. The P/S ratio is calculated as price divided by sales. This is a preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. OPBK has a P/S ratio of 1.27. This compares to its industry's average P/S of 2.39.

Finally, our model also underscores that OPBK has a P/CF ratio of 8.10. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. OPBK's current P/CF looks attractive when compared to its industry's average P/CF of 17.90. OPBK's P/CF has been as high as 10.31 and as low as 5.98, with a median of 7.51, all within the past year.

These are only a few of the key metrics included in OP Bancorp'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, OPBK looks like an impressive value stock at the moment.

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This article originally published on Zacks Investment Research (zacks.com).

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