Many investors like to look for value in stocks, but this can be very tough to define. There is great debate regarding which metrics are the best to focus on in this regard, and which are not really quality indicators of future performance. Fortunately, with our new style score system we have identified the key statistics to pay close attention to and thus which stocks might be the best for value investors in the near term.
This method discovered several great candidates for value-oriented investors, but today let’s focus on Konica Minolta, Inc. (KNCAY - Free Report) as this stock is looking especially impressive right now. And while there are numerous reasons why this is the case, we have highlighted three of the most vital reasons for KNCAY’s status as a solid value stock below:
Forward PE for Konica Minolta
Easily one of the most popular readings for value investors, the forward PE ratio shows us the current price of a stock divided by the full year earnings. Generally speaking, value investors like to see this ratio below 20, though it can vary by industry.
Right now, KNCAY has a forward PE of just 13.34, which means that investors are paying $13.34 for each dollar in expected Konica Minolta earnings this year. Compared to the industry at large this is pretty favorable as the overall space has an average PE of 14.91 in comparison.
KONICA MINOLTA PE Ratio (TTM)
Price to Forward Sales for Konica Minolta
One of the most underrated ratios for value investors is the price/forward sales metric. This ratio shows investors how much they are paying for each dollar of revenues generated. In other words, a lower number is better here while a price to sales ratio of 1 means that you are paying one dollar for each dollar in sales.
With a P/S ratio of 0.41, KNCAY investors are paying 41 cents in stock price for each dollar of revenue generated by the company. Compare this to the industry average of 0.78, and it is safe to say that KNCAY is undervalued compared to many of its peers on this important metric.
KNCAY Earnings Estimate Revisions Moving in the Right Direction
The solid value ratios outlined in the preceding paragraphs might be enough for some investors, but we should also note that the earnings estimate revisions have been trending in a positive direction as well. Analysts who follow KNCAY stock have been raising their estimates for the company lately, meaning that the EPS picture is looking a bit more favorably for Konica Minolta now.
Over the past 30 days, 1 earnings estimates have gone higher compared to none lower for the full year, while we are also seeing that 1 estimate has move upwards with no downward revision for the next year time frame too. These revisions have helped to boost the consensus estimate as 30 days ago KNCAY was expected to post earnings of $1.21 per share for the full year though today it looks to have EPS of $1.26 for the full year.
For the reasons detailed above, investors shouldn’t be surprised to read that we have KNCAY as a stock with a Value Score of ‘A’ and a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
So if you are a value investor, definitely keep KNCAY on your short list as this looks to be a stock that is very well-positioned for gains in the near term.
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