On Wednesday, Kubota Corp (JPTSE:6326) shares edged 1.63% higher after announcing a strategic partnership with Irish-based consulting and professional services firm Accenture Plc (NYSE:ACN).
The heavy machinery manufacturer wants to speed up its digital transformation process in a rapidly changing business environment. Kubota is adapting its business model to aid in food, water, and environmental sustainability.
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It will utilise Accenture’s diverse portfolio of digital technologies, including the Internet of Things (IoT) and artificial intelligence (AI) solutions.
Kubota shares could be potentially undervalued
Kubota stock has experienced a choppy trading period since the turn of the year. The stock surged more than 17% between January and May before plunging more than 20% through 20th August. However, shares have spiked since last week, gaining 8.4%.
As a result, Kubota has swang to a net year-to-date gain of just 3.35%, which prices the stock at an attractive P/E ratio of 16.25, making it a compelling option for value investors.
Moreover, the stock also trades a dividend yield of 1.73%, as of this writing, providing a layer of cushion amid its recent volatility. Therefore, Kubota stock seems like a good option for both value investors and dividend investors ahead of its exciting digital transformation process.
Kubota could be about to break out
Technically, Kubota shares seem to be trading within a sideways channel formation in the intraday chart.
The stock has recently bounced off the trendline support after bottoming at about ¥2,126 ($19.26) to surge above ¥2,311 ($20.94). However, it is yet to hit overbought conditions in the 14-day RSI, leaving room for more upward movement.
As a result, the stock could surge above the trendline resistance, triggering a breakout. Therefore, investors can target extended gains at approximately ¥2,417 or higher at ¥2,526.
On the other hand, if Kubota shares pull back amid a change in the market sentiment, the stock could find support at ¥2,223 or lower at ¥2,126.
Bottom line: it is not too late to buy Kubota shares
In summary, although Kubota shares have recently spiked more than 8%, the stock is yet to hit overbought conditions of the 14-day RSI. Moreover, Kubota seems potentially undervalued based on its attractive P/E ratio of 16.25.
Therefore, given the company’s exciting future amid digital transformation, it may be the time to invest in the Japanese industrials giant.
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