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Are Investors Undervaluing Harmony Gold (HMY) Right Now?

Zacks Equity Research

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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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.

Harmony Gold (HMY) is a stock many investors are watching right now. HMY is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 6.83, while its industry has an average P/E of 19.89. HMY's Forward P/E has been as high as 43.60 and as low as 5.11, with a median of 7.21, all within the past year.

Another notable valuation metric for HMY is its P/B ratio of 0.95. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. HMY's current P/B looks attractive when compared to its industry's average P/B of 1.93. Over the past 12 months, HMY's P/B has been as high as 1.07 and as low as 0.36, with a median of 0.49.

These are just a handful of the figures considered in Harmony Gold's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that HMY is an impressive value stock right now.


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