Back to top

Image: Bigstock

Is China Yuchai (CYD) a Great Value Stock Right Now?

Read MoreHide Full Article

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.

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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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.

China Yuchai (CYD - Free Report) is a stock many investors are watching right now. CYD is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 8.30 right now. For comparison, its industry sports an average P/E of 17.17. Over the past 52 weeks, CYD's Forward P/E has been as high as 9.79 and as low as 3, with a median of 6.82.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. CYD has a P/S ratio of 0.26. This compares to its industry's average P/S of 0.58.

Finally, we should also recognize that CYD has a P/CF ratio of 4.92. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. CYD's current P/CF looks attractive when compared to its industry's average P/CF of 8.82. Within the past 12 months, CYD's P/CF has been as high as 5.72 and as low as 2.16, with a median of 3.80.

These are just a handful of the figures considered in China Yuchai'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 CYD is an impressive value stock right now.

In-Depth Zacks Research for the Tickers Above

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

China Yuchai International Limited (CYD) - free report >>

Published in