Should Value Investors Buy Itochu (ITOCY) Stock?

Zacks Equity Research
·2-min read

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.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. 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 company to watch right now is Itochu (ITOCY). ITOCY is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 10.95. This compares to its industry's average Forward P/E of 15.65. Over the past 52 weeks, ITOCY's Forward P/E has been as high as 24.17 and as low as 10.63, with a median of 11.63.

Finally, investors should note that ITOCY has a P/CF ratio of 8.07. 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. This stock's P/CF looks attractive against its industry's average P/CF of 18.80. Over the past 52 weeks, ITOCY's P/CF has been as high as 8.51 and as low as 5.63, with a median of 6.89.

Value investors will likely look at more than just these metrics, but the above data helps show that Itochu is likely undervalued currently. And when considering the strength of its earnings outlook, ITOCY sticks out at as one of the market's strongest value stocks.

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