Investors with an interest in Electronics – Semiconductors stocks have likely encountered both ASE Technology Hldg (ASX – Free Report) and Advanced Micro Devices (AMD – Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let’s take a closer look.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
ASE Technology Hldg and Advanced Micro Devices are both sporting a Zacks Rank of # 2 (Buy) right now. This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. However, value investors will care about much more than just this.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
ASX currently has a forward P/E ratio of 9.99, while AMD has a forward P/E of 57.01. We also note that ASX has a PEG ratio of 0.37. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock’s expected earnings growth rate. AMD currently has a PEG ratio of 1.23.
Another notable valuation metric for ASX is its P/B ratio of 1.85. The P/B ratio is used to compare a stock’s market value with its book value, which is defined as total assets minus total liabilities. For comparison, AMD has a P/B of 25.50.
These are just a few of the metrics contributing to ASX’s Value grade of A and AMD’s Value grade of D.
Both ASX and AMD are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that ASX is the superior value option right now.