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Is Orix (IX) a Great Value Stock 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 use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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 holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 5.85, while its industry has an average P/E of 9.56. IX's Forward P/E has been as high as 7.26 and as low as 5.40, with a median of 6.23, all within the past year.

We also note that IX holds a PEG ratio of 0.81. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. IX's PEG compares to its industry's average PEG of 1.02. Over the last 12 months, IX's PEG has been as high as 1.03 and as low as 0.76, with a median of 0.87.

We should also highlight that IX has a P/B ratio of 0.69. 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 stock's P/B looks solid versus its industry's average P/B of 1.86. IX's P/B has been as high as 0.84 and as low as 0.65, with a median of 0.74, over the past year.

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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. IX has a P/S ratio of 0.86. This compares to its industry's average P/S of 1.64.

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


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