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Are Investors Undervaluing Lakeland Bancorp (LBAI) Right Now?

Zacks Equity Research
·2-min read

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

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.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One company value investors might notice is Lakeland Bancorp (LBAI). LBAI is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 9.95, which compares to its industry's average of 11.96. Over the past 52 weeks, LBAI's Forward P/E has been as high as 12.70 and as low as 6.31, with a median of 11.06.

Another valuation metric that we should highlight is LBAI's P/B ratio of 0.76. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 1.47. Within the past 52 weeks, LBAI's P/B has been as high as 1.24 and as low as 0.61, with a median of 1.11.

Finally, investors will want to recognize that LBAI has a P/CF ratio of 7.41. 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. LBAI's current P/CF looks attractive when compared to its industry's average P/CF of 12.86. Over the past 52 weeks, LBAI's P/CF has been as high as 11.79 and as low as 5.54, with a median of 10.24.

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


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