Back to top

Image: Bigstock

Is Internet Initiative Japan (IIJIY) a Great Value Stock Right Now?

Read MoreHide Full Article

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, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. 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.

One company value investors might notice is Internet Initiative Japan (IIJIY - Free Report) . IIJIY is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 23.60, which compares to its industry's average of 25.75. Over the last 12 months, IIJIY's Forward P/E has been as high as 40.63 and as low as 21.64, with a median of 27.22.

We should also highlight that IIJIY has a P/B ratio of 3.92. 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 company's current P/B looks solid when compared to its industry's average P/B of 7.70. Within the past 52 weeks, IIJIY's P/B has been as high as 4.28 and as low as 2.11, with a median of 2.67.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by 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. IIJIY has a P/S ratio of 1.65. This compares to its industry's average P/S of 3.33.

Finally, investors will want to recognize that IIJIY has a P/CF ratio of 8.76. 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. This stock's P/CF looks attractive against its industry's average P/CF of 30.33. Within the past 12 months, IIJIY's P/CF has been as high as 9.56 and as low as 5.36, with a median of 6.74.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Internet Initiative Japan is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, IIJIY feels like a great value stock at the moment.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Internet Initiative Japan, Inc. (IIJIY) - free report >>

Published in