Investors interested in Electronics - Semiconductors stocks are likely familiar with ASE Industrial Holding (ASX) and Himax Tech (HIMX). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
ASE Industrial Holding and Himax Tech 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. But this is just one piece of the puzzle for value investors.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their 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 9.76, while HIMX has a forward P/E of 45.37. We also note that ASX has a PEG ratio of 1.24. 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. HIMX currently has a PEG ratio of 1.81.
Another notable valuation metric for ASX is its P/B ratio of 1.18. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, HIMX has a P/B of 1.57.
Based on these metrics and many more, ASX holds a Value grade of A, while HIMX has a Value grade of C.
Both ASX and HIMX are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that ASX is the superior value option right now.
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Advanced Semiconductor Engineering, Inc. (ASX) : Free Stock Analysis Report
Himax Technologies, Inc. (HIMX) : Free Stock Analysis Report
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