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Should Value Investors Buy Denso (DNZOY) Stock?

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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.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader 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.

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 Denso (DNZOY - Free Report) . DNZOY is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock holds a P/E ratio of 11.15, while its industry has an average P/E of 12.67. Over the past 52 weeks, DNZOY's Forward P/E has been as high as 17.57 and as low as 10.79, with a median of 12.31.

Another notable valuation metric for DNZOY is its P/B ratio of 1.11. 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. DNZOY's current P/B looks attractive when compared to its industry's average P/B of 1.67. Over the past 12 months, DNZOY's P/B has been as high as 1.68 and as low as 1.07, with a median of 1.26.

Finally, investors should note that DNZOY has a P/CF ratio of 8.65. 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. This stock's P/CF looks attractive against its industry's average P/CF of 22.20. Over the past 52 weeks, DNZOY's P/CF has been as high as 11.20 and as low as 8.50, with a median of 9.38.

Investors could also keep in mind Volvo (VLVLY - Free Report) , an Automotive - Original Equipment stock with a Zacks Rank of # 2 (Buy) and Value grade of A.

Shares of Volvo are currently trading at a forward earnings multiple of 10.02 and a PEG ratio of 0.60 compared to its industry's P/E and PEG ratios of 12.67 and 0.76, respectively.


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