Are Investors Undervaluing Chemung Financial (CHMG) Right Now?

Zacks Equity Research
·2-min read

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.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. 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.

One stock to keep an eye on is Chemung Financial (CHMG). CHMG is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value.

We should also highlight that CHMG has a P/B ratio of 0.87. Investors use the P/B ratio to look at a stock's market value versus 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 0.91. Over the past 12 months, CHMG's P/B has been as high as 1.22 and as low as 0.61, with a median of 0.76.

Finally, investors will want to recognize that CHMG has a P/CF ratio of 7.17. 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. Over the past 52 weeks, CHMG's P/CF has been as high as 9.89 and as low as 5.38, with a median of 7.28.

These are only a few of the key metrics included in Chemung Financial'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, CHMG looks like an impressive value stock at the moment.


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