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Should Value Investors Buy Mazda Motor (MZDAY) Stock?

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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.

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.

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 Mazda Motor (MZDAY - Free Report) . MZDAY is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock holds a P/E ratio of 5.81, while its industry has an average P/E of 9.62. Over the past 52 weeks, MZDAY's Forward P/E has been as high as 7.65 and as low as 4.44, with a median of 5.91.

Finally, we should also recognize that MZDAY has a P/CF ratio of 3.42. 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. MZDAY's P/CF compares to its industry's average P/CF of 10.79. Over the past 52 weeks, MZDAY's P/CF has been as high as 4.20 and as low as 2.17, with a median of 3.07.

Investors could also keep in mind Toyota Motor (TM - Free Report) , an Automotive - Foreign stock with a Zacks Rank of # 1 (Strong Buy) and Value grade of A.

Toyota Motor is trading at a forward earnings multiple of 9.44 at the moment, with a PEG ratio of 0.52. This compares to its industry's average P/E of 9.62 and average PEG ratio of 0.44.

TM's Forward P/E has been as high as 10.49 and as low as 7.74, with a median of 8.86. During the same time period, its PEG ratio has been as high as 2.51, as low as 0.52, with a median of 1.17.

Toyota Motor sports a P/B ratio of 1.02 as well; this compares to its industry's price-to-book ratio of 3.45. In the past 52 weeks, TM's P/B has been as high as 1.09, as low as 0.86, with a median of 0.95.

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


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