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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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
Nomura (NMR) is a stock many investors are watching right now. NMR is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 7.76, which compares to its industry's average of 12.24. NMR's Forward P/E has been as high as 18.79 and as low as 7.70, with a median of 9.72, all within the past year.
Another valuation metric that we should highlight is NMR's P/B ratio of 0.76. 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 1.89. Over the past 12 months, NMR's P/B has been as high as 0.86 and as low as 0.64, with a median of 0.75.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. NMR has a P/S ratio of 0.7. This compares to its industry's average P/S of 1.92.
Finally, investors will want to recognize that NMR has a P/CF ratio of 7.10. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 13.83. Over the past year, NMR's P/CF has been as high as 16.29 and as low as 6.37, with a median of 9.27.