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Should Value Investors Buy Honda Motor Co. (HMC) Stock?
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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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.
One stock to keep an eye on is Honda Motor Co. (HMC - Free Report) . HMC is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 7.73, which compares to its industry's average of 9.30. Over the past 52 weeks, HMC's Forward P/E has been as high as 9.18 and as low as 6.32, with a median of 7.64.
Another valuation metric that we should highlight is HMC's P/B ratio of 0.61. The P/B ratio is used to compare a stock's market value with 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 1.17. Within the past 52 weeks, HMC's P/B has been as high as 0.70 and as low as 0.45, with a median of 0.55.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. HMC has a P/S ratio of 0.43. This compares to its industry's average P/S of 0.62.
Finally, our model also underscores that HMC has a P/CF ratio of 4.48. 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 6.99. Over the past 52 weeks, HMC's P/CF has been as high as 5.30 and as low as 3.64, with a median of 4.29.
Investors could also keep in mind Toyota Motor (TM - Free Report) , an Automotive - Foreign stock with a Zacks Rank of # 1 (Strong Buy) and Value grade of A.
Shares of Toyota Motor currently holds a Forward P/E ratio of 10.01, and its PEG ratio is 0.46. In comparison, its industry sports average P/E and PEG ratios of 9.30 and 0.36.
TM's Forward P/E has been as high as 10.75 and as low as 8.26, with a median of 9.16. During the same time period, its PEG ratio has been as high as 2.51, as low as 0.43, with a median of 1.17.
Toyota Motor sports a P/B ratio of 1.11 as well; this compares to its industry's price-to-book ratio of 1.17. In the past 52 weeks, TM's P/B has been as high as 1.16, as low as 0.84, with a median of 0.96.
Value investors will likely look at more than just these metrics, but the above data helps show that Honda Motor Co. and Toyota Motor are likely undervalued currently. And when considering the strength of its earnings outlook, HMC and TM sticks out as one of the market's strongest value stocks.
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Should Value Investors Buy Honda Motor Co. (HMC) Stock?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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.
One stock to keep an eye on is Honda Motor Co. (HMC - Free Report) . HMC is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 7.73, which compares to its industry's average of 9.30. Over the past 52 weeks, HMC's Forward P/E has been as high as 9.18 and as low as 6.32, with a median of 7.64.
Another valuation metric that we should highlight is HMC's P/B ratio of 0.61. The P/B ratio is used to compare a stock's market value with 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 1.17. Within the past 52 weeks, HMC's P/B has been as high as 0.70 and as low as 0.45, with a median of 0.55.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. HMC has a P/S ratio of 0.43. This compares to its industry's average P/S of 0.62.
Finally, our model also underscores that HMC has a P/CF ratio of 4.48. 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 6.99. Over the past 52 weeks, HMC's P/CF has been as high as 5.30 and as low as 3.64, with a median of 4.29.
Investors could also keep in mind Toyota Motor (TM - Free Report) , an Automotive - Foreign stock with a Zacks Rank of # 1 (Strong Buy) and Value grade of A.
Shares of Toyota Motor currently holds a Forward P/E ratio of 10.01, and its PEG ratio is 0.46. In comparison, its industry sports average P/E and PEG ratios of 9.30 and 0.36.
TM's Forward P/E has been as high as 10.75 and as low as 8.26, with a median of 9.16. During the same time period, its PEG ratio has been as high as 2.51, as low as 0.43, with a median of 1.17.
Toyota Motor sports a P/B ratio of 1.11 as well; this compares to its industry's price-to-book ratio of 1.17. In the past 52 weeks, TM's P/B has been as high as 1.16, as low as 0.84, with a median of 0.96.
Value investors will likely look at more than just these metrics, but the above data helps show that Honda Motor Co. and Toyota Motor are likely undervalued currently. And when considering the strength of its earnings outlook, HMC and TM sticks out as one of the market's strongest value stocks.