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Is Honda Motor (HMC) a Great Value Stock Right Now?
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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.
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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company value investors might notice is Honda Motor (HMC - Free Report) . HMC is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 7.85. This compares to its industry's average Forward P/E of 11.08. HMC's Forward P/E has been as high as 14.24 and as low as 7.67, with a median of 8.62, all within the past year.
HMC is also sporting a PEG ratio of 0.55. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. HMC's PEG compares to its industry's average PEG of 0.64. Over the last 12 months, HMC's PEG has been as high as 0.78 and as low as 0.35, with a median of 0.56.
Investors should also recognize that HMC has a P/B ratio of 0.61. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. HMC's current P/B looks attractive when compared to its industry's average P/B of 0.95. Within the past 52 weeks, HMC's P/B has been as high as 0.67 and as low as 0.52, with a median of 0.60.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. HMC has a P/S ratio of 0.37. This compares to its industry's average P/S of 0.49.
Finally, investors will want to recognize that HMC has a P/CF ratio of 3.58. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 6.30. Over the past year, HMC's P/CF has been as high as 6.16 and as low as 3.58, with a median of 4.94.
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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Is Honda Motor (HMC) a Great Value Stock Right Now?
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.
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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company value investors might notice is Honda Motor (HMC - Free Report) . HMC is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 7.85. This compares to its industry's average Forward P/E of 11.08. HMC's Forward P/E has been as high as 14.24 and as low as 7.67, with a median of 8.62, all within the past year.
HMC is also sporting a PEG ratio of 0.55. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. HMC's PEG compares to its industry's average PEG of 0.64. Over the last 12 months, HMC's PEG has been as high as 0.78 and as low as 0.35, with a median of 0.56.
Investors should also recognize that HMC has a P/B ratio of 0.61. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. HMC's current P/B looks attractive when compared to its industry's average P/B of 0.95. Within the past 52 weeks, HMC's P/B has been as high as 0.67 and as low as 0.52, with a median of 0.60.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. HMC has a P/S ratio of 0.37. This compares to its industry's average P/S of 0.49.
Finally, investors will want to recognize that HMC has a P/CF ratio of 3.58. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 6.30. Over the past year, HMC's P/CF has been as high as 6.16 and as low as 3.58, with a median of 4.94.
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.