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Is Harmony Gold (HMY) a Great Value Stock Right Now?

Zacks Equity Research

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.

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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One stock to keep an eye on is Harmony Gold (HMY). HMY is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 6.02. This compares to its industry's average Forward P/E of 17.94. Over the last 12 months, HMY's Forward P/E has been as high as 43.60 and as low as 5.11, with a median of 7.21.

Another valuation metric that we should highlight is HMY's P/B ratio of 1.04. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 1.09. Over the past year, HMY's P/B has been as high as 1.19 and as low as 0.36, with a median of 0.50.

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

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Zacks Investment Research