We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Is Honda Motor Co. (HMC) Stock Undervalued Right Now?
Read MoreHide Full Article
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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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 company to watch right now is Honda Motor Co. (HMC - Free Report) . HMC is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 7.66 right now. For comparison, its industry sports an average P/E of 7.68. Over the last 12 months, HMC's Forward P/E has been as high as 8.60 and as low as 6.05, with a median of 6.99.
Investors will also notice that HMC has a PEG ratio of 0.47. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. HMC's PEG compares to its industry's average PEG of 0.67. Over the past 52 weeks, HMC's PEG has been as high as 1.59 and as low as 0.39, with a median of 0.64.
We should also highlight that HMC has a P/B ratio of 0.58. The P/B ratio pits a stock's market value against 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 1.57. HMC's P/B has been as high as 0.58 and as low as 0.43, with a median of 0.49, 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. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. HMC has a P/S ratio of 0.39. This compares to its industry's average P/S of 0.63.
Finally, investors should note that HMC has a P/CF ratio of 4.59. 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. HMC's current P/CF looks attractive when compared to its industry's average P/CF of 5.79. HMC's P/CF has been as high as 4.59 and as low as 3.38, with a median of 3.90, all within the past year.
These are only a few of the key metrics included in Honda Motor Co.'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, HMC looks like an impressive value stock at the moment.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Is Honda Motor Co. (HMC) Stock Undervalued Right Now?
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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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 company to watch right now is Honda Motor Co. (HMC - Free Report) . HMC is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 7.66 right now. For comparison, its industry sports an average P/E of 7.68. Over the last 12 months, HMC's Forward P/E has been as high as 8.60 and as low as 6.05, with a median of 6.99.
Investors will also notice that HMC has a PEG ratio of 0.47. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. HMC's PEG compares to its industry's average PEG of 0.67. Over the past 52 weeks, HMC's PEG has been as high as 1.59 and as low as 0.39, with a median of 0.64.
We should also highlight that HMC has a P/B ratio of 0.58. The P/B ratio pits a stock's market value against 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 1.57. HMC's P/B has been as high as 0.58 and as low as 0.43, with a median of 0.49, 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. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. HMC has a P/S ratio of 0.39. This compares to its industry's average P/S of 0.63.
Finally, investors should note that HMC has a P/CF ratio of 4.59. 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. HMC's current P/CF looks attractive when compared to its industry's average P/CF of 5.79. HMC's P/CF has been as high as 4.59 and as low as 3.38, with a median of 3.90, all within the past year.
These are only a few of the key metrics included in Honda Motor Co.'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, HMC looks like an impressive value stock at the moment.