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Should Value Investors Buy Suzuki Motor (SZKMY) Stock?

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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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.

Suzuki Motor (SZKMY - Free Report) is a stock many investors are watching right now. SZKMY is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.

Another notable valuation metric for SZKMY is its P/B ratio of 0.99. 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 1.60. Over the past year, SZKMY's P/B has been as high as 1.09 and as low as 0.69, with a median of 0.93.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. SZKMY has a P/S ratio of 0.48. This compares to its industry's average P/S of 0.62.

Finally, our model also underscores that SZKMY has a P/CF ratio of 5.63. 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. SZKMY's current P/CF looks attractive when compared to its industry's average P/CF of 5.88. Within the past 12 months, SZKMY's P/CF has been as high as 7.06 and as low as 4.79, with a median of 5.82.

Value investors will likely look at more than just these metrics, but the above data helps show that Suzuki Motor is likely undervalued currently. And when considering the strength of its earnings outlook, SZKMY sticks out at as one of the market's strongest value stocks.


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