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Is ADVA OPTICAL (ADVOF) a Great Value Stock Right Now?

Zacks Equity Research
·2 min read

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One company to watch right now is ADVA OPTICAL (ADVOF). ADVOF is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.

Another valuation metric that we should highlight is ADVOF's P/B ratio of 1.35. 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 attractive against its industry's average P/B of 2.23. Within the past 52 weeks, ADVOF's P/B has been as high as 1.64 and as low as 0.88, with a median of 1.21.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by 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. ADVOF has a P/S ratio of 0.62. This compares to its industry's average P/S of 0.77.

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


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Zacks Investment Research