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Is Komatsu (KMTUY) a Great Value Stock Right Now?

Zacks Equity Research
·2-min read

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 Komatsu (KMTUY). KMTUY is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 10.73. This compares to its industry's average Forward P/E of 14.76. KMTUY's Forward P/E has been as high as 14.80 and as low as 9.49, with a median of 10.83, all within the past year.

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Finally, our model also underscores that KMTUY has a P/CF ratio of 7.28. 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 10.22. KMTUY's P/CF has been as high as 11.66 and as low as 6.58, with a median of 8.10, all within the past year.

Value investors will likely look at more than just these metrics, but the above data helps show that Komatsu is likely undervalued currently. And when considering the strength of its earnings outlook, KMTUY sticks out at as one of the market's strongest value stocks.


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