Should Value Investors Buy Mazda Motor (MZDAY) Stock?
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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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 holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 5.67, while its industry has an average P/E of 7.74. Over the past year, MZDAY's Forward P/E has been as high as 9.47 and as low as 4.44, with a median of 6.12.
Investors should also recognize that MZDAY has a P/B ratio of 0.52. 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. MZDAY's current P/B looks attractive when compared to its industry's average P/B of 0.90. MZDAY's P/B has been as high as 0.60 and as low as 0.38, with a median of 0.47, over the past year.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. MZDAY has a P/S ratio of 0.19. This compares to its industry's average P/S of 0.5.
Finally, our model also underscores that MZDAY has a P/CF ratio of 2.84. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 4.81. 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 3.12.
Investors could also keep in mind Yamaha Motor Co. (YAMHF), an Automotive - Foreign stock with a Zacks Rank of # 2 (Buy) and Value grade of A.
Yamaha Motor Co. sports a P/B ratio of 1.09 as well; this compares to its industry's price-to-book ratio of 0.90. In the past 52 weeks, YAMHF's P/B has been as high as 1.22, as low as 0.78, with a median of 0.91.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Mazda Motor and Yamaha Motor Co. are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, MZDAY and YAMHF feels like a great value stock at the moment.
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Mazda Motor Corporation (MZDAY) : Free Stock Analysis Report
Yamaha Motor Co., Ltd. (YAMHF) : Free Stock Analysis Report
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