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Is Orix (IX) a Great Value Stock Right Now?

Zacks Equity Research

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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 to watch right now is Orix (IX). IX is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 5.73, which compares to its industry's average of 9.83. Over the past year, IX's Forward P/E has been as high as 7.03 and as low as 5.40, with a median of 6.13.

We also note that IX holds a PEG ratio of 0.79. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. IX's PEG compares to its industry's average PEG of 1.11. IX's PEG has been as high as 0.98 and as low as 0.76, with a median of 0.86, all within the past year.

We should also highlight that IX has a P/B ratio of 0.67. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. IX's current P/B looks attractive when compared to its industry's average P/B of 1.60. Within the past 52 weeks, IX's P/B has been as high as 0.83 and as low as 0.65, with a median of 0.73.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. IX has a P/S ratio of 0.85. This compares to its industry's average P/S of 1.59.

These are just a handful of the figures considered in Orix'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 IX is an impressive value stock right now.


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