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Should Value Investors Buy Mazda Motor (MZDAY) Stock?

·3-min read

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 use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One stock to keep an eye on is Mazda Motor (MZDAY). MZDAY is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock holds a P/E ratio of 6.64, while its industry has an average P/E of 9.74. Over the past 52 weeks, MZDAY's Forward P/E has been as high as 12.20 and as low as 5.37, with a median of 8.15.

Investors should also recognize that MZDAY has a P/B ratio of 0.44. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 0.93. Over the past 12 months, MZDAY's P/B has been as high as 0.56 and as low as 0.36, with a median of 0.46.

Finally, investors will want to recognize that MZDAY has a P/CF ratio of 3.36. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. MZDAY's P/CF compares to its industry's average P/CF of 4.76. Over the past year, MZDAY's P/CF has been as high as 4.88 and as low as 2.62, with a median of 3.37.

These are just a handful of the figures considered in Mazda Motor'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 MZDAY is an impressive value stock right now.


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