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Are Investors Undervaluing Mazda Motor (MZDAY) Right Now?

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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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

Mazda Motor (MZDAY - Free Report) is a stock many investors are watching right now. MZDAY is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock is trading with P/E ratio of 5.93 right now. For comparison, its industry sports an average P/E of 9.35. Over the last 12 months, MZDAY's Forward P/E has been as high as 13.05 and as low as 5.37, with a median of 8.33.

We should also highlight that MZDAY has a P/B ratio of 0.40. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. MZDAY's current P/B looks attractive when compared to its industry's average P/B of 0.95. Within the past 52 weeks, MZDAY's P/B has been as high as 0.56 and as low as 0.36, with a median of 0.46.

Finally, investors will want to recognize that MZDAY has a P/CF ratio of 3.06. 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 4.85. MZDAY's P/CF has been as high as 4.83 and as low as 2.60, with a median of 3.41, all within the past year.

Volkswagen (VWAGY - Free Report) may be another strong Automotive - Foreign stock to add to your shortlist. VWAGY is a # 2 (Buy) stock with a Value grade of A.

Volkswagen is currently trading with a Forward P/E ratio of 4.85 while its PEG ratio sits at 0.52. Both of the company's metrics compare favorably to its industry's average P/E of 9.35 and average PEG ratio of 0.39.

VWAGY's price-to-earnings ratio has been as high as 10.36 and as low as 4.59, with a median of 8.63, while its PEG ratio has been as high as 0.94 and as low as 0.49, with a median of 0.75, all within the past year.

Additionally, Volkswagen has a P/B ratio of 0.53 while its industry's price-to-book ratio sits at 0.95. For VWAGY, this valuation metric has been as high as 1.09, as low as 0.50, with a median of 0.88 over the past year.

These are only a few of the key metrics included in Mazda Motor and Volkswagen strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, MZDAY and VWAGY look like an impressive value stock at the moment.


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