Are Investors Undervaluing Nomura (NMR) Right Now?

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.

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.

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 Nomura (NMR). NMR 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 9.7, which compares to its industry's average of 15.23. Over the past year, NMR's Forward P/E has been as high as 11.13 and as low as 6.19, with a median of 8.63.

Another valuation metric that we should highlight is NMR's P/B ratio of 0.89. 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 solid versus its industry's average P/B of 2.40. Over the past 12 months, NMR's P/B has been as high as 0.90 and as low as 0.62, with a median of 0.77.

Finally, our model also underscores that NMR has a P/CF ratio of 7.63. 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 17. NMR's P/CF has been as high as 9.60 and as low as 5.73, with a median of 7.23, all within the past year.

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

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This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research

Source Zacks-com