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Is Denso (DNZOY) Stock Undervalued 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.

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.

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.

Denso (DNZOY - Free Report) is a stock many investors are watching right now. DNZOY is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 16.55, which compares to its industry's average of 22.33. DNZOY's Forward P/E has been as high as 41.34 and as low as 12.92, with a median of 15.38, all within the past year.

Another notable valuation metric for DNZOY is its P/B ratio of 1.69. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 4.31. Over the past year, DNZOY's P/B has been as high as 1.69 and as low as 1.19, with a median of 1.41.

Finally, investors will want to recognize that DNZOY has a P/CF ratio of 10.43. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 15.94. Over the past year, DNZOY's P/CF has been as high as 22.73 and as low as 7.96, with a median of 11.51.

These are just a handful of the figures considered in Denso'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 DNZOY is an impressive value stock right now.


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