Back to top

Image: Bigstock

Are Investors Undervaluing Mitsubishi (MSBHF) Right Now?

Read MoreHide Full Article

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.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. 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 Mitsubishi (MSBHF - Free Report) . MSBHF is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 14.85, which compares to its industry's average of 16.33. Over the past 52 weeks, MSBHF's Forward P/E has been as high as 15.96 and as low as 10.10, with a median of 12.75.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. MSBHF has a P/S ratio of 0.7. This compares to its industry's average P/S of 0.97.

Finally, we should also recognize that MSBHF has a P/CF ratio of 8.85. 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. MSBHF's P/CF compares to its industry's average P/CF of 15.68. Over the past 52 weeks, MSBHF's P/CF has been as high as 8.86 and as low as 5.72, with a median of 7.49.

These are only a few of the key metrics included in Mitsubishi's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, MSBHF looks like an impressive value stock at the moment.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Mitsubishi Corp. (MSBHF) - free report >>

Published in