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Should Value Investors Buy Hennes & Mauritz (HNNMY) Stock?

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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, value investing is easily one of the most popular ways to find great stocks in any market environment. 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.

Hennes & Mauritz (HNNMY - Free Report) is a stock many investors are watching right now. HNNMY is currently sporting a Zacks Rank #2 (Buy) and an A for Value.

Another notable valuation metric for HNNMY is its P/B ratio of 6.09. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 7.23. Within the past 52 weeks, HNNMY's P/B has been as high as 6.27 and as low as 4.01, with a median of 4.87.

Finally, we should also recognize that HNNMY has a P/CF ratio of 8.11. 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. HNNMY's P/CF compares to its industry's average P/CF of 18.35. Within the past 12 months, HNNMY's P/CF has been as high as 9.27 and as low as 6.08, with a median of 7.14.

These are only a few of the key metrics included in Hennes & Mauritz's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, HNNMY looks like an impressive value stock at the moment.


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