Are Investors Undervaluing Yamaha Motor Co. (YAMHF) Right Now?
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, 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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company value investors might notice is Yamaha Motor Co. (YAMHF). YAMHF is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock holds a P/E ratio of 5.57, while its industry has an average P/E of 8.43. Over the past year, YAMHF's Forward P/E has been as high as 9.36 and as low as 5.18, with a median of 6.30.
Another valuation metric that we should highlight is YAMHF's P/B ratio of 0.84. 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 company's current P/B looks solid when compared to its industry's average P/B of 0.89. Over the past year, YAMHF's P/B has been as high as 1.31 and as low as 0.78, with a median of 0.92.
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. YAMHF has a P/S ratio of 0.41. This compares to its industry's average P/S of 0.49.
Finally, we should also recognize that YAMHF has a P/CF ratio of 3.82. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 4.24. Over the past 52 weeks, YAMHF's P/CF has been as high as 5.52 and as low as 3.48, with a median of 4.15.
Value investors will likely look at more than just these metrics, but the above data helps show that Yamaha Motor Co. Is likely undervalued currently. And when considering the strength of its earnings outlook, YAMHF sticks out at as one of the market's strongest value stocks.
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