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.
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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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.
Honda Motor (HMC) is a stock many investors are watching right now. HMC is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock holds a P/E ratio of 7.01, while its industry has an average P/E of 7.27. HMC’s Forward P/E has been as high as 10.71 and as low as 6.35, with a median of 8.67, all within the past year.
We should also highlight that HMC has a P/B ratio of 0.62. 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 0.86. HMC’s P/B has been as high as 0.88 and as low as 0.61, with a median of 0.76, over the past year.
These are just a handful of the figures considered in Honda Motor’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 HMC is an impressive value stock right now.
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