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Investors interested in stocks from the Electronics - Semiconductors sector have probably already heard of ASE Technology Hldg (ASX) and Lattice Semiconductor (LSCC). 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Currently, ASE Technology Hldg has a Zacks Rank of #2 (Buy), while Lattice Semiconductor has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that ASX likely has seen a stronger improvement to its earnings outlook than LSCC has recently. But this is only part of the picture for value investors.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
ASX currently has a forward P/E ratio of 10.85, while LSCC has a forward P/E of 51.52. We also note that ASX has a PEG ratio of 0.73. 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. LSCC currently has a PEG ratio of 5.15.
Another notable valuation metric for ASX is its P/B ratio of 1.80. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, LSCC has a P/B of 15.31.
These are just a few of the metrics contributing to ASX's Value grade of A and LSCC's Value grade of D.
ASX has seen stronger estimate revision activity and sports more attractive valuation metrics than LSCC, so it seems like value investors will conclude that ASX is the superior option right now.
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ASE Technology Holding Co., Ltd. (ASX) : Free Stock Analysis Report
Lattice Semiconductor Corporation (LSCC) : Free Stock Analysis Report
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