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Are Investors Undervaluing Orix (IX) Right Now?

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The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find 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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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.

Orix (IX - Free Report) is a stock many investors are watching right now. IX is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 8.57, while its industry has an average P/E of 15.53. IX's Forward P/E has been as high as 9.28 and as low as 4.33, with a median of 6.76, all within the past year.

Another notable valuation metric for IX is its P/B ratio of 0.75. 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 company's current P/B looks solid when compared to its industry's average P/B of 1.82. Over the past year, IX's P/B has been as high as 0.80 and as low as 0.47, with a median of 0.57.

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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. IX has a P/S ratio of 1.05. This compares to its industry's average P/S of 2.38.

Finally, we should also recognize that IX has a P/CF ratio of 4.23. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. IX's P/CF compares to its industry's average P/CF of 7.91. Over the past year, IX's P/CF has been as high as 4.39 and as low as 2.32, with a median of 3.03.

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


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