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.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 Nomura (NMR – Free Report) . NMR is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 9.17, which compares to its industry’s average of 14.05. Over the past 52 weeks, NMR’s Forward P/E has been as high as 18.79 and as low as 8.63, with a median of 12.71.
We also note that NMR holds a PEG ratio of 0.41. 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. NMR’s industry has an average PEG of 0.99 right now. NMR’s PEG has been as high as 0.58 and as low as 0.35, with a median of 0.41, all within the past year.
Another notable valuation metric for NMR is its P/B ratio of 0.76. Investors use the P/B ratio to look at a stock’s market value versus its book value, which is defined as total assets minus total liabilities. NMR’s current P/B looks attractive when compared to its industry’s average P/B of 2.02. NMR’s P/B has been as high as 0.86 and as low as 0.61, with a median of 0.74, over the past year.
Finally, investors will want to recognize that NMR has a P/CF ratio of 7.84. This figure highlights a company’s operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This stock’s P/CF looks attractive against its industry’s average P/CF of 16.51. Within the past 12 months, NMR’s P/CF has been as high as 16.29 and as low as 6.85, with a median of 10.58.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Nomura is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, NMR feels like a great value stock at the moment.
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