Back to top

Image: Bigstock

Should Value Investors Buy Bayerische Motoren Werke (BAMXF) Stock?

Read MoreHide Full Article

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 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.

One company to watch right now is Bayerische Motoren Werke (BAMXF - Free Report) . BAMXF is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock holds a P/E ratio of 6.37, while its industry has an average P/E of 7.71. Over the last 12 months, BAMXF's Forward P/E has been as high as 7.48 and as low as 3.09, with a median of 5.98.

Another valuation metric that we should highlight is BAMXF's P/B ratio of 0.73. 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 solid versus its industry's average P/B of 1.67. Over the past year, BAMXF's P/B has been as high as 0.75 and as low as 0.43, with a median of 0.57.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. BAMXF has a P/S ratio of 0.45. This compares to its industry's average P/S of 0.65.

Finally, investors will want to recognize that BAMXF has a P/CF ratio of 3.74. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. BAMXF's P/CF compares to its industry's average P/CF of 6.11. Within the past 12 months, BAMXF's P/CF has been as high as 3.83 and as low as 1.57, with a median of 2.06.

These are only a few of the key metrics included in Bayerische Motoren Werke's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, BAMXF looks like an impressive value stock at the moment.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Bayerische Motoren Werke AG (BAMXF) - free report >>

Published in