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.
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.
Toyota Motor (TM) is a stock many investors are watching right now. TM is currently sporting a Zacks Rank #2 (Buy) and an A for Value.
TM is also sporting a PEG ratio of 0.33. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. TM's PEG compares to its industry's average PEG of 0.40. Over the past 52 weeks, TM's PEG has been as high as 0.35 and as low as 0.28, with a median of 0.30.
We should also highlight that TM has a P/B ratio of 1.05. The P/B ratio pits a stock's market value against 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 1.15. TM's P/B has been as high as 1.14 and as low as 0.88, with a median of 1.01, over the past year.
Finally, we should also recognize that TM has a P/CF ratio of 5.97. 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. This stock's P/CF looks attractive against its industry's average P/CF of 6.68. Within the past 12 months, TM's P/CF has been as high as 6.16 and as low as 4.44, with a median of 5.40.
These are just a handful of the figures considered in Toyota 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 TM is an impressive value stock right now.
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Toyota Motor Corporation (TM): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).