Are Investors Undervaluing OP Bancorp (OPBK) Right Now?

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.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of 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 OP Bancorp (OPBK). OPBK is currently holding a Zacks Rank #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 8.02. This compares to its industry's average Forward P/E of 11.05. Over the past year, 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 valuation metric that we should highlight is OPBK's P/B ratio of 1.02. The P/B is a method of comparing a stock's market value to 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 1.85. 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 frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. 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 1.28. This compares to its industry's average P/S of 2.22.

Finally, investors should note 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 16. 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 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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