Yahoo Finance Is China Automotive Systems (CAAS) Stock Undervalued Right Now?
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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One company value investors might notice is China Automotive Systems (CAAS). CAAS is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock holds a P/E ratio of 13.52, while its industry has an average P/E of 20.40. Over the past 52 weeks, CAAS's Forward P/E has been as high as 19.31 and as low as 4.89, with a median of 12.60.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. CAAS has a P/S ratio of 0.38. This compares to its industry's average P/S of 0.81.
Investors could also keep in mind Volvo (VLVLY), an Automotive - Original Equipment stock with a Zacks Rank of # 2 (Buy) and Value grade of A.
Volvo is currently trading with a Forward P/E ratio of 11.76 while its PEG ratio sits at 0.67. Both of the company's metrics compare favorably to its industry's average P/E of 20.40 and average PEG ratio of 1.20.
VLVLY's Forward P/E has been as high as 13.09 and as low as 7.86, with a median of 9.78. During the same time period, its PEG ratio has been as high as 1.07, as low as 0.51, with a median of 0.64.
Volvo also has a P/B ratio of 2.44 compared to its industry's price-to-book ratio of 2.19. Over the past year, its P/B ratio has been as high as 2.90, as low as 1.78, with a median of 2.16.
Value investors will likely look at more than just these metrics, but the above data helps show that China Automotive Systems and Volvo are likely undervalued currently. And when considering the strength of its earnings outlook, CAAS and VLVLY sticks out as one of the market's strongest value stocks.
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China Automotive Systems, Inc. (CAAS) : Free Stock Analysis Report
AB Volvo (VLVLY) : Free Stock Analysis Report
