Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put Daimler AG stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:
PE Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, Daimler has a trailing twelve months PE ratio of 7.9. This level compares pretty favorably with the market at large, as the PE ratio for the S&P 500 comes in at about 20.5.
If we focus on the long-term trend of the stock the current level puts Daimler’s current PE among its lower zone, below its median over the observed period (which stands at 8.9x). Hence, we could infer that the stock is undervalued in this respect, especially in light of its historical trend. Thus, the present level seems to be a suitable entry point for the stock from a PE perspective.
Further, the stock’s PE compares favorably with its industry’s trailing twelve months PE ratio, which stands at 10.8. At the very least, this indicates that the stock is relatively undervalued right now, compared to its peers.
We should also point out that Daimler has a forward PE ratio (price relative to this year’s earnings) of 7.4 – lower than the current level. So, it is fair to say that a more value-oriented path may be ahead for Daimler stock in the near term.
PS Ratio
Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.
Right now, Daimler has a P/S ratio of about 0.5. This is similar to the industry average, which comes in at 0.5x right now too.
As we can see, the stock is trading at its median value for the time period from a P/S metric. This does not provide us with a conclusive direction as to the relative valuation of the stock in comparison to its historical trend.
Broad Value Outlook
In aggregate, Daimler currently has a Value Score of A, putting it into the top 20% of all stocks we cover from this look. This makes Daimler a solid choice for value investors, and all of its above listed metrics make this pretty clear too.
What About the Stock Overall?
Though Daimler might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth grade of D and a Momentum score of B. This gives DDAIF a Zacks VGM score—or its overarching fundamental grade—of B. (You can read more about the Zacks Style Scores here >>).
Meanwhile, the company’s recent earnings estimates have been trending upward lately. The current year has seen two estimates go higher in the past sixty days compared to none lower, while the next year estimate has also seen two upward revisions and no downward revisions in the same time period.
This has had a small but meaningful impact on the consensus estimate though as the current year consensus estimate has risen by 4.4% in the past two months, while the full year estimate has increased 3.3%. You can see the consensus estimate trend and recent price action for the stock in the chart below:
Daimler AG Price and Consensus
This positive trend signifies bullish analyst sentiment, and its Zacks Rank #2 (Buy) indicates robust fundamentals and expectations of outperformance in the near term.
Bottom Line
Daimler is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. Boasting a formidable industry rank (among the Top 4% out of more than 250 industries) and a strong Zacks Rank, the company deserves attention right now. So, it might pay for value investors to delve deeper into the company’s prospects, as fundamentals indicate that this stock could be a compelling pick.
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Is Daimler (DDAIF) a Suitable Pick for Value Investors?
Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put Daimler AG stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:
PE Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, Daimler has a trailing twelve months PE ratio of 7.9. This level compares pretty favorably with the market at large, as the PE ratio for the S&P 500 comes in at about 20.5.
If we focus on the long-term trend of the stock the current level puts Daimler’s current PE among its lower zone, below its median over the observed period (which stands at 8.9x). Hence, we could infer that the stock is undervalued in this respect, especially in light of its historical trend. Thus, the present level seems to be a suitable entry point for the stock from a PE perspective.
Further, the stock’s PE compares favorably with its industry’s trailing twelve months PE ratio, which stands at 10.8. At the very least, this indicates that the stock is relatively undervalued right now, compared to its peers.
We should also point out that Daimler has a forward PE ratio (price relative to this year’s earnings) of 7.4 – lower than the current level. So, it is fair to say that a more value-oriented path may be ahead for Daimler stock in the near term.
PS Ratio
Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.
Right now, Daimler has a P/S ratio of about 0.5. This is similar to the industry average, which comes in at 0.5x right now too.
As we can see, the stock is trading at its median value for the time period from a P/S metric. This does not provide us with a conclusive direction as to the relative valuation of the stock in comparison to its historical trend.
Broad Value Outlook
In aggregate, Daimler currently has a Value Score of A, putting it into the top 20% of all stocks we cover from this look. This makes Daimler a solid choice for value investors, and all of its above listed metrics make this pretty clear too.
What About the Stock Overall?
Though Daimler might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth grade of D and a Momentum score of B. This gives DDAIF a Zacks VGM score—or its overarching fundamental grade—of B. (You can read more about the Zacks Style Scores here >>).
Meanwhile, the company’s recent earnings estimates have been trending upward lately. The current year has seen two estimates go higher in the past sixty days compared to none lower, while the next year estimate has also seen two upward revisions and no downward revisions in the same time period.
This has had a small but meaningful impact on the consensus estimate though as the current year consensus estimate has risen by 4.4% in the past two months, while the full year estimate has increased 3.3%. You can see the consensus estimate trend and recent price action for the stock in the chart below:
Daimler AG Price and Consensus
Daimler AG Price and Consensus | Daimler AG Quote
This positive trend signifies bullish analyst sentiment, and its Zacks Rank #2 (Buy) indicates robust fundamentals and expectations of outperformance in the near term.
Bottom Line
Daimler is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. Boasting a formidable industry rank (among the Top 4% out of more than 250 industries) and a strong Zacks Rank, the company deserves attention right now. So, it might pay for value investors to delve deeper into the company’s prospects, as fundamentals indicate that this stock could be a compelling pick.
Can Hackers Put Money INTO Your Portfolio?
Earlier this month, credit bureau Equifax announced a massive data breach affecting 2 out of every 3 Americans. The cybersecurity industry is expanding quickly in response to this and similar events. But some stocks are better investments than others.
Zacks has just released Cybersecurity! An Investor’s Guide to help Zacks.com readers make the most of the $170 billion per year investment opportunity created by hackers and other threats. It reveals 4 stocks worth looking into right away.
Download the new report now>>