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.
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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One company value investors might notice is Mazda Motor Corporation (MZDAY). MZDAY is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A.
We should also highlight that MZDAY has a P/B ratio of 0.32. The P/B is a method of comparing a stock's market value to 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 0.83. Over the past 12 months, MZDAY's P/B has been as high as 0.59 and as low as 0.25, with a median of 0.47.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. MZDAY has a P/S ratio of 0.12. This compares to its industry's average P/S of 0.34.
Finally, investors will want to recognize that MZDAY has a P/CF ratio of 2.81. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. MZDAY's current P/CF looks attractive when compared to its industry's average P/CF of 4.53. Within the past 12 months, MZDAY's P/CF has been as high as 5.52 and as low as 2.18, with a median of 4.15.
Value investors will likely look at more than just these metrics, but the above data helps show that Mazda Motor Corporation is likely undervalued currently. And when considering the strength of its earnings outlook, MZDAY sticks out at as one of the market's strongest value stocks.
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