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Is HITACHI CONSTR (HTCMY) Stock Undervalued Right Now?

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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.

HITACHI CONSTR (HTCMY) is a stock many investors are watching right now. HTCMY is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock has a Forward P/E ratio of 9.49. This compares to its industry's average Forward P/E of 15.74. HTCMY's Forward P/E has been as high as 19.12 and as low as 8.73, with a median of 15.37, all within 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. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. HTCMY has a P/S ratio of 0.56. This compares to its industry's average P/S of 0.96.

Finally, investors will want to recognize that HTCMY has a P/CF ratio of 4.38. 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 company's current P/CF looks solid when compared to its industry's average P/CF of 10.79. Within the past 12 months, HTCMY's P/CF has been as high as 12.72 and as low as 4.01, with a median of 7.01.

Another great Manufacturing - Construction and Mining stock you could consider is Komatsu (KMTUY), which is a # 2 (Buy) stock with a Value Score of A.

Komatsu is currently trading with a Forward P/E ratio of 10.30 while its PEG ratio sits at 0.31. Both of the company's metrics compare favorably to its industry's average P/E of 15.74 and average PEG ratio of 1.13.

Over the last 12 months, KMTUY's P/E has been as high as 16.31, as low as 9.49, with a median of 11.30, and its PEG ratio has been as high as 1.75, as low as 0.31, with a median of 0.38.

Furthermore, Komatsu holds a P/B ratio of 1.17 and its industry's price-to-book ratio is 5.49. KMTUY's P/B has been as high as 1.55, as low as 1.04, with a median of 1.25 over the past 12 months.

These are just a handful of the figures considered in HITACHI CONSTR and Komatsu'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 HTCMY and KMTUY is an impressive value stock right now.


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