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Are Investors Undervaluing Honda Motor (HMC) Right Now?

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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.

Honda Motor (HMC - Free Report) is a stock many investors are watching right now. HMC is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock has a Forward P/E ratio of 11.27. This compares to its industry's average Forward P/E of 12.73. Over the past 52 weeks, HMC's Forward P/E has been as high as 14.24 and as low as 5.51, with a median of 10.83.

Investors should also note that HMC holds a PEG ratio of 0.62. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. HMC's industry currently sports an average PEG of 0.82. HMC's PEG has been as high as 3.48 and as low as 0.58, with a median of 0.78, all within the past year.

We should also highlight that HMC has a P/B ratio of 0.64. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 0.84. Over the past year, HMC's P/B has been as high as 0.65 and as low as 0.43, with a median of 0.58.

These are just a handful of the figures considered in Honda Motor's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that HMC is an impressive value stock right now.

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