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Is Waterstone Financial (WSBF) a Great Value Stock Right Now?

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The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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.

Waterstone Financial (WSBF - Free Report) is a stock many investors are watching right now. WSBF is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. WSBF has a P/S ratio of 1.65. This compares to its industry's average P/S of 2.92.

Finally, we should also recognize that WSBF has a P/CF ratio of 6.16. 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 company's current P/CF looks solid when compared to its industry's average P/CF of 7.49. WSBF's P/CF has been as high as 7.59 and as low as 5.21, with a median of 6.41, all within the past year.

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


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