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Are Investors Undervaluing Northrim BanCorp (NRIM) Right Now?

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 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 to watch right now is Northrim BanCorp (NRIM). NRIM is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 8.68. This compares to its industry's average Forward P/E of 12.57. NRIM's Forward P/E has been as high as 18.65 and as low as 7.49, with a median of 11.54, all within the past year.

Another valuation metric that we should highlight is NRIM's P/B ratio of 0.93. 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 stock's P/B looks attractive against its industry's average P/B of 1.16. NRIM's P/B has been as high as 1.30 and as low as 0.63, with a median of 0.86, over the past year.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. NRIM has a P/S ratio of 1.54. This compares to its industry's average P/S of 2.58.

Finally, we should also recognize that NRIM has a P/CF ratio of 6.39. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 13.83. Over the past 52 weeks, NRIM's P/CF has been as high as 10.86 and as low as 4.96, with a median of 6.87.

These are just a handful of the figures considered in Northrim BanCorp's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that NRIM is an impressive value stock right now.


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