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Are Investors Undervaluing Home Bancorp (HBCP) Right Now?

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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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.

Home Bancorp (HBCP) is a stock many investors are watching right now. HBCP is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 10.54, which compares to its industry's average of 12.04. Over the past 52 weeks, HBCP's Forward P/E has been as high as 12.96 and as low as 8.74, with a median of 10.71.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's 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. HBCP has a P/S ratio of 2.74. This compares to its industry's average P/S of 2.99.

Finally, our model also underscores that HBCP has a P/CF ratio of 8.73. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. HBCP's P/CF compares to its industry's average P/CF of 11. Over the past year, HBCP's P/CF has been as high as 9.01 and as low as 5.42, with a median of 7.48.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Home Bancorp is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, HBCP feels like a great value stock at the moment.


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