Hitachi Cheap; Still a Hold

The following excerpts explain why Zacks senior technology analyst Steve Biggs, CFA remains neutral on Hitachi, Ltd. (HIT - Analyst Report) one of the largest producer of electronic products in the world:

"Growing price competition in emerging technologies and increasing cost of raw materials has hurt Hitachi. Moreover, its net cash balance (cash less debt) has been continuously deteriorating, which has resulted in a cut to its annual dividend. However, the company continues to make progress in implementing its management plan for cutting operating costs and achieving profitability.

"Hitachi is trading towards the lower end of its 52-week range. On a price-to-sales basis, the stock is trading at a very reasonable 0.3x estimated fiscal year ending March 2008 estimates. We expect the stock to maintain a valuation in this range given the uncertain economic outlook.

"As such, our new six-month target price of $74.00 reflects a P/S multiple of 0.3x fiscal year ending March 2008 revenue per ADS estimate of $270.93. We maintain a Hold recommendation on the shares of Hitachi."

Read the full analyst report on HIT.