Back to top

Image: Bigstock

Should Value Investors Buy Mitsubishi (MSBHF) Stock?

Read MoreHide Full Article

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of 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.

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 stock to keep an eye on is Mitsubishi (MSBHF - Free Report) . MSBHF is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 14.81. This compares to its industry's average Forward P/E of 15.91. Over the past year, MSBHF's Forward P/E has been as high as 15.06 and as low as 10.10, with a median of 12.49.

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. MSBHF has a P/S ratio of 0.62. This compares to its industry's average P/S of 0.85.

Finally, we should also recognize that MSBHF has a P/CF ratio of 7.61. 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. MSBHF's current P/CF looks attractive when compared to its industry's average P/CF of 14.74. Within the past 12 months, MSBHF's P/CF has been as high as 9.40 and as low as 5.72, with a median of 7.36.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Mitsubishi is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, MSBHF feels like a great value stock at the moment.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Mitsubishi Corp. (MSBHF) - free report >>

Published in