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Are Investors Undervaluing Customers Bancorp (CUBI) Right Now?

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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

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.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

Customers Bancorp (CUBI - Free Report) is a stock many investors are watching right now. CUBI is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock holds a P/E ratio of 6.66, while its industry has an average P/E of 12.25. Over the past 52 weeks, CUBI's Forward P/E has been as high as 6.92 and as low as 2.98, with a median of 4.58.

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. CUBI has a P/S ratio of 1.59. This compares to its industry's average P/S of 3.01.

Finally, investors should note that CUBI has a P/CF ratio of 5.99. 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. This stock's P/CF looks attractive against its industry's average P/CF of 11. CUBI's P/CF has been as high as 6.26 and as low as 2.69, with a median of 3.78, all within the past year.

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


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