Are Investors Undervaluing Wintrust Financial (WTFC) 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.

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

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

Wintrust Financial (WTFC) is a stock many investors are watching right now. WTFC is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 9.16. This compares to its industry's average Forward P/E of 9.59. WTFC's Forward P/E has been as high as 17.11 and as low as 9.16, with a median of 13.04, all within the past year.

WTFC is also sporting a PEG ratio of 0.54. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. WTFC's PEG compares to its industry's average PEG of 0.91. Over the past 52 weeks, WTFC's PEG has been as high as 1.01 and as low as 0.54, with a median of 0.72.

Another valuation metric that we should highlight is WTFC's P/B ratio of 1.18. 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 2.03. Over the past year, WTFC's P/B has been as high as 1.47 and as low as 1.06, with a median of 1.25.

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. WTFC has a P/S ratio of 2.66. This compares to its industry's average P/S of 2.76.

Finally, our model also underscores that WTFC has a P/CF ratio of 9.30. 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. WTFC's current P/CF looks attractive when compared to its industry's average P/CF of 15.70. Over the past year, WTFC's P/CF has been as high as 10.61 and as low as 7.28, with a median of 9.30.

These are just a handful of the figures considered in Wintrust Financial'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 WTFC is an impressive value stock right now.

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