Is OP Bancorp (OPBK) Stock Undervalued Right Now?

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.

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 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 to watch right now is OP Bancorp (OPBK). OPBK is currently sporting a Zacks Rank #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 8.02 right now. For comparison, its industry sports an average P/E of 11.44. Over the last 12 months, OPBK's Forward P/E has been as high as 12.35 and as low as 6.22, with a median of 7.72.

Another notable valuation metric for OPBK is its P/B ratio of 1.02. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. OPBK's current P/B looks attractive when compared to its industry's average P/B of 1.89. OPBK's P/B has been as high as 1.34 and as low as 0.75, with a median of 0.96, over the past year.

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 1.35. This compares to its industry's average P/S of 2.22.

Finally, our model also underscores that OPBK has a P/CF ratio of 8.10. 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. OPBK's current P/CF looks attractive when compared to its industry's average P/CF of 16.49. Within the past 12 months, OPBK's P/CF has been as high as 10.31 and as low as 5.98, with a median of 7.51.

These figures are just a handful of the metrics value investors tend to look at, but they help show that OP Bancorp is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, OPBK feels like a great value stock at the moment.

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

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