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Should Value Investors Buy Johnson Matthey (JMPLY) Stock?

While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

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.

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 stock to keep an eye on is Johnson Matthey (JMPLY). JMPLY is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 11.25 right now. For comparison, its industry sports an average P/E of 16.38. Over the last 12 months, JMPLY's Forward P/E has been as high as 12.27 and as low as 7.32, with a median of 9.70.

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Investors should also recognize that JMPLY has a P/B ratio of 1.65. 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. JMPLY's current P/B looks attractive when compared to its industry's average P/B of 2.59. Over the past year, JMPLY's P/B has been as high as 1.68 and as low as 1.07, with a median of 1.39.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Johnson Matthey is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, JMPLY feels like a great value stock at the moment.

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Johnson Matthey PLC (JMPLY) : Free Stock Analysis Report

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Zacks Investment Research