Should Value Investors Buy Hitachi (HTHIY) Stock?
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.
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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 (HTHIY) is a stock many investors are watching right now. HTHIY is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 12.06, which compares to its industry's average of 19.14. HTHIY's Forward P/E has been as high as 13.32 and as low as 8.06, with a median of 9.99, all within the past year.
HTHIY is also sporting a PEG ratio of 1.64. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. HTHIY's industry has an average PEG of 2.06 right now. Over the past 52 weeks, HTHIY's PEG has been as high as 2.48 and as low as 1.59, with a median of 1.93.
Investors should also recognize that HTHIY has a P/B ratio of 1.29. 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 stock's P/B looks attractive against its industry's average P/B of 3.09. Over the past 12 months, HTHIY's P/B has been as high as 1.37 and as low as 0.92, with a median of 1.15.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. HTHIY has a P/S ratio of 0.6. This compares to its industry's average P/S of 1.04.
Finally, investors should note that HTHIY has a P/CF ratio of 6.51. 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 16.04. Within the past 12 months, HTHIY's P/CF has been as high as 6.91 and as low as 4.06, with a median of 5.56.
If you're looking for another solid Diversified Operations value stock, take a look at Live Ventures (LIVE). LIVE is a # 1 (Strong Buy) stock with a Value score of A.
Live Ventures sports a P/B ratio of 1.13 as well; this compares to its industry's price-to-book ratio of 3.09. In the past 52 weeks, LIVE's P/B has been as high as 1.43, as low as 0.68, with a median of 0.90.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Hitachi and Live Ventures are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, HTHIY and LIVE feels like a great value stock at the moment.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Hitachi Ltd. (HTHIY) : Free Stock Analysis Report
Live Ventures Incorporated (LIVE) : Free Stock Analysis Report
To read this article on Zacks.com click here.