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Are Investors Undervaluing Honda Motor Co. (HMC) Right Now?
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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 use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 Honda Motor Co. (HMC - Free Report) . HMC is currently sporting a Zacks Rank #1 (Strong Buy) and an A for Value. The stock is trading with P/E ratio of 9.87 right now. For comparison, its industry sports an average P/E of 10.53. Over the past year, HMC's Forward P/E has been as high as 10.44 and as low as 5.17, with a median of 6.92.
Another valuation metric that we should highlight is HMC's P/B ratio of 0.63. 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. HMC's current P/B looks attractive when compared to its industry's average P/B of 1.09. Over the past year, HMC's P/B has been as high as 0.66 and as low as 0.44, with a median of 0.55.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's 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. HMC has a P/S ratio of 0.34. This compares to its industry's average P/S of 0.4.
Finally, we should also recognize that HMC has a P/CF ratio of 5.08. 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. HMC's current P/CF looks attractive when compared to its industry's average P/CF of 6.98. Over the past 52 weeks, HMC's P/CF has been as high as 5.31 and as low as 3.12, with a median of 4.11.
These are only a few of the key metrics included in Honda Motor Co.'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, HMC looks like an impressive value stock at the moment.
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Are Investors Undervaluing Honda Motor Co. (HMC) Right Now?
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 use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 Honda Motor Co. (HMC - Free Report) . HMC is currently sporting a Zacks Rank #1 (Strong Buy) and an A for Value. The stock is trading with P/E ratio of 9.87 right now. For comparison, its industry sports an average P/E of 10.53. Over the past year, HMC's Forward P/E has been as high as 10.44 and as low as 5.17, with a median of 6.92.
Another valuation metric that we should highlight is HMC's P/B ratio of 0.63. 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. HMC's current P/B looks attractive when compared to its industry's average P/B of 1.09. Over the past year, HMC's P/B has been as high as 0.66 and as low as 0.44, with a median of 0.55.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's 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. HMC has a P/S ratio of 0.34. This compares to its industry's average P/S of 0.4.
Finally, we should also recognize that HMC has a P/CF ratio of 5.08. 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. HMC's current P/CF looks attractive when compared to its industry's average P/CF of 6.98. Over the past 52 weeks, HMC's P/CF has been as high as 5.31 and as low as 3.12, with a median of 4.11.
These are only a few of the key metrics included in Honda Motor Co.'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, HMC looks like an impressive value stock at the moment.