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Is Nidec (NJDCY) Stock Undervalued 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.

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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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.

One stock to keep an eye on is Nidec (NJDCY - Free Report) . NJDCY is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.

NJDCY is also sporting a PEG ratio of 1.19. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. NJDCY's industry currently sports an average PEG of 1.92. NJDCY's PEG has been as high as 2.13 and as low as 1.01, with a median of 1.40, all within the past year.

Another notable valuation metric for NJDCY is its P/B ratio of 2.08. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 4.57. Over the past 12 months, NJDCY's P/B has been as high as 3.27 and as low as 1.87, with a median of 2.81.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. NJDCY has a P/S ratio of 1.42. This compares to its industry's average P/S of 1.5.

Finally, investors will want to recognize that NJDCY has a P/CF ratio of 17.40. 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. NJDCY's current P/CF looks attractive when compared to its industry's average P/CF of 26.14. Over the past year, NJDCY's P/CF has been as high as 26.76 and as low as 13.08, with a median of 19.71.

These are just a handful of the figures considered in Nidec'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 NJDCY is an impressive value stock right now.

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