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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.
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.
Midland States Bancorp (MSBI) is a stock many investors are watching right now. MSBI is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 6.98, which compares to its industry's average of 9.52. Over the last 12 months, MSBI's Forward P/E has been as high as 11.26 and as low as 5.82, with a median of 8.30.
Another notable valuation metric for MSBI is its P/B ratio of 0.55. 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 0.96. Within the past 52 weeks, MSBI's P/B has been as high as 0.85 and as low as 0.46, with a median of 0.71.
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 prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. MSBI has a P/S ratio of 0.79. This compares to its industry's average P/S of 1.8.
These are just a handful of the figures considered in Midland States Bancorp's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that MSBI is an impressive value stock right now.
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