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Should Value Investors Buy Subaru Corporation (FUJHY) Stock?

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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.

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.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One company to watch right now is Subaru Corporation (FUJHY - Free Report) . FUJHY is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 6.09 right now. For comparison, its industry sports an average P/E of 9.20. Over the last 12 months, FUJHY's Forward P/E has been as high as 8.20 and as low as 5.71, with a median of 6.82.

We also note that FUJHY holds a PEG ratio of 0.27. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. FUJHY's PEG compares to its industry's average PEG of 0.38. Over the last 12 months, FUJHY's PEG has been as high as 0.50 and as low as 0.25, with a median of 0.30.

Investors should also recognize that FUJHY has a P/B ratio of 0.86. Investors use the P/B ratio to look at a stock's market value versus 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 1.13. Over the past 12 months, FUJHY's P/B has been as high as 1 and as low as 0.76, with a median of 0.85.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. FUJHY has a P/S ratio of 0.44. This compares to its industry's average P/S of 0.59.

Finally, our model also underscores that FUJHY has a P/CF ratio of 3.83. 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. FUJHY's P/CF compares to its industry's average P/CF of 6.75. Over the past year, FUJHY's P/CF has been as high as 5.08 and as low as 3.59, with a median of 4.02.

Another great Automotive - Foreign stock you could consider is Stellantis (STLA - Free Report) , which is a # 2 (Buy) stock with a Value Score of A.

Stellantis is currently trading with a Forward P/E ratio of 3.52 while its PEG ratio sits at 1.82. Both of the company's metrics compare favorably to its industry's average P/E of 9.20 and average PEG ratio of 0.38.

STLA's Forward P/E has been as high as 4.28 and as low as 2.79, with a median of 3.49. During the same time period, its PEG ratio has been as high as 2.12, as low as 0.08, with a median of 1.64.

Stellantis also has a P/B ratio of 0.71 compared to its industry's price-to-book ratio of 1.13. Over the past year, its P/B ratio has been as high as 0.77, as low as 0.58, with a median of 0.68.

These are just a handful of the figures considered in Subaru Corporation and Stellantis'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 FUJHY and STLA is an impressive value stock right now.


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