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Should Value Investors Buy Konica Minolta (KNCAY) 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.

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 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.

Konica Minolta (KNCAY - Free Report) is a stock many investors are watching right now. KNCAY is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. KNCAY has a P/S ratio of 0.26. This compares to its industry's average P/S of 0.41.

Finally, investors will want to recognize that KNCAY has a P/CF ratio of 3.95. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 10.19. Within the past 12 months, KNCAY's P/CF has been as high as 3.97 and as low as -7.73, with a median of 2.57.

Value investors will likely look at more than just these metrics, but the above data helps show that Konica Minolta is likely undervalued currently. And when considering the strength of its earnings outlook, KNCAY sticks out at as one of the market's strongest value stocks.


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