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Are Investors Undervaluing Honda Motor Co. (HMC) Right Now?
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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.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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.
Honda Motor Co. (HMC - Free Report) is a stock many investors are watching right now. HMC is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock has a Forward P/E ratio of 7.57. This compares to its industry's average Forward P/E of 9.57. HMC's Forward P/E has been as high as 9.18 and as low as 6.87, with a median of 7.65, all within the past year.
HMC is also sporting a PEG ratio of 0.36. 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. HMC's PEG compares to its industry's average PEG of 0.50. Over the last 12 months, HMC's PEG has been as high as 1.59 and as low as 0.32, with a median of 0.47.
Investors should also recognize that HMC has a P/B ratio of 0.67. 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 stock's P/B looks solid versus its industry's average P/B of 1.50. Within the past 52 weeks, HMC's P/B has been as high as 0.70 and as low as 0.52, with a median of 0.60.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. HMC has a P/S ratio of 0.45. This compares to its industry's average P/S of 0.85.
Finally, investors will want to recognize that HMC has a P/CF ratio of 4.68. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. HMC's current P/CF looks attractive when compared to its industry's average P/CF of 7.53. Over the past 52 weeks, HMC's P/CF has been as high as 5.30 and as low as 3.93, with a median of 4.34.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Honda Motor Co. Is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, HMC feels like a great value stock at the moment.
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Are Investors Undervaluing Honda Motor Co. (HMC) Right Now?
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.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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.
Honda Motor Co. (HMC - Free Report) is a stock many investors are watching right now. HMC is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock has a Forward P/E ratio of 7.57. This compares to its industry's average Forward P/E of 9.57. HMC's Forward P/E has been as high as 9.18 and as low as 6.87, with a median of 7.65, all within the past year.
HMC is also sporting a PEG ratio of 0.36. 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. HMC's PEG compares to its industry's average PEG of 0.50. Over the last 12 months, HMC's PEG has been as high as 1.59 and as low as 0.32, with a median of 0.47.
Investors should also recognize that HMC has a P/B ratio of 0.67. 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 stock's P/B looks solid versus its industry's average P/B of 1.50. Within the past 52 weeks, HMC's P/B has been as high as 0.70 and as low as 0.52, with a median of 0.60.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. HMC has a P/S ratio of 0.45. This compares to its industry's average P/S of 0.85.
Finally, investors will want to recognize that HMC has a P/CF ratio of 4.68. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. HMC's current P/CF looks attractive when compared to its industry's average P/CF of 7.53. Over the past 52 weeks, HMC's P/CF has been as high as 5.30 and as low as 3.93, with a median of 4.34.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Honda Motor Co. Is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, HMC feels like a great value stock at the moment.