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Should Value Investors Buy Itochu Corp. (ITOCY) Stock?

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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One company to watch right now is Itochu Corp. (ITOCY - Free Report) . ITOCY is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.

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. ITOCY has a P/S ratio of 0.44. This compares to its industry's average P/S of 0.68.

Finally, our model also underscores that ITOCY has a P/CF ratio of 5.13. 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. ITOCY's current P/CF looks attractive when compared to its industry's average P/CF of 14.79. Within the past 12 months, ITOCY's P/CF has been as high as 5.46 and as low as 3.34, with a median of 4.34.

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


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