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Should Value Investors Buy Nomura (NMR) 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.

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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One company value investors might notice is Nomura (NMR - Free Report) . NMR is currently sporting a Zacks Rank #1 (Strong Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 9.7, which compares to its industry's average of 14.66. Over the past 52 weeks, NMR's Forward P/E has been as high as 11.13 and as low as 6.19, with a median of 8.63.

Another valuation metric that we should highlight is NMR's P/B ratio of 0.89. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 2.33. NMR's P/B has been as high as 0.90 and as low as 0.62, with a median of 0.77, over the past year.

Finally, we should also recognize that NMR has a P/CF ratio of 7.63. 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. NMR's current P/CF looks attractive when compared to its industry's average P/CF of 16.51. Over the past 52 weeks, NMR's P/CF has been as high as 9.60 and as low as 5.73, with a median of 7.23.

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


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