💎 Does NMR belong to value stocks or growth stocks?

Nomura Holdings (NMR) exhibits characteristics of both value and growth stocks, making it a suitable candidate for a balanced investment approach:

1. Valuation Metrics:
   • NMR's Price-to-Earnings (P/E) ratio is 10.15, which suggests that the stock may be undervalued compared to earnings. This is a characteristic often associated with value stocks.
   • The Price-to-Sales (P/S) ratio of 1.56 indicates a reasonable valuation based on sales. This is more in line with growth stocks that are not overly expensive relative to their revenue.
   • With a Price-to-Book (P/B) ratio of 0.88, NMR's stock is trading below its book value. This is a common feature of value stocks, which are often seen as attractive because they are trading at a discount to their intrinsic value.

NMR P/E(TTM), Price to Book Ratio

2. Dividend Yield:
   • NMR does not have a dividend yield listed, which is a feature of some growth stocks that prioritize reinvestment in the business rather than returning capital to shareholders through dividends.

3. Profitability and Growth:
   • NMR's Return on Equity (ROE) is 7.77%, which is a modest figure and could be indicative of the company's potential for growth as it improves operational efficiency.
   • The company's net income has experienced a compound annual growth rate (CAGR) of -12.94% over the past five years, indicating a decline. However, the most recent quarter's net income doubled from the previous year, reaching ¥101.4 billion, surpassing analyst expectations.
   • NMR's revenue has also seen a CAGR of -3.63% over the past five years, but it recently increased by 25% from the previous quarter, reaching JP¥502.0 billion.

NMR ROE(Average)

4. Market Sentiment and Analyst Ratings:
   • Institutional investors have shown interest in NMR, with JPMorgan Chase & Co. increasing its stake by 225.7%, which could be a sign of confidence in the company's growth potential.
   • Analysts have upgraded NMR from a "hold" to a "buy" rating, indicating a positive outlook on the stock.
5. Strategic Positioning:
   • NMR has made strides in cost reduction and benefited from strong trading and investment banking business, which are positive signs for growth.
   • The company's investment banking revenue rose by 14%, reaching its highest level since at least 2016, showing a strong competitive position in its sector.

In conclusion, NMR's mix of value (low P/E ratio, P/B ratio below 1, and lack of dividend yield) and growth (recent revenue and net income increases, positive analyst ratings, and strategic cost reduction) characteristics make it a stock that could appeal to investors looking for a balanced investment opportunity.