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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company to watch right now is Orix Corp Ads (IX). IX is currently sporting a Zacks Rank #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 10.59. This compares to its industry's average Forward P/E of 13.35. Over the past year, IX's Forward P/E has been as high as 10.60 and as low as 7.34, with a median of 9.04.
We should also highlight that IX has a P/B ratio of 1.06. 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. This stock's P/B looks attractive against its industry's average P/B of 2.87. Within the past 52 weeks, IX's P/B has been as high as 1.11 and as low as 0.76, with a median of 0.89.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. IX has a P/S ratio of 1.85. This compares to its industry's average P/S of 2.3.
Finally, investors will want to recognize that IX has a P/CF ratio of 6.00. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. IX's P/CF compares to its industry's average P/CF of 14.06. Over the past year, IX's P/CF has been as high as 6.42 and as low as 4.20, with a median of 4.72.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Orix Corp Ads is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, IX feels like a great value stock at the moment.
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Orix Corp Ads (IX): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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