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 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 Mazda Motor (MZDAY). MZDAY is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 5.80. This compares to its industry's average Forward P/E of 7.51. Over the past 52 weeks, MZDAY's Forward P/E has been as high as 9.47 and as low as 4.44, with a median of 6.02.
Another notable valuation metric for MZDAY is its P/B ratio of 0.56. Investors use the P/B ratio to look at a stock's market value versus 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 1.59. Over the past 12 months, MZDAY's P/B has been as high as 0.60 and as low as 0.38, with a median of 0.48.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. MZDAY has a P/S ratio of 0.2. This compares to its industry's average P/S of 0.52.
Finally, investors will want to recognize that MZDAY has a P/CF ratio of 3.10. 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. MZDAY's current P/CF looks attractive when compared to its industry's average P/CF of 5.58. Over the past 52 weeks, MZDAY's P/CF has been as high as 4.20 and as low as 2.17, with a median of 3.10.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Mazda Motor is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, MZDAY feels like a great value stock at the moment.
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