ASX vs. SYNA: Which Stock Should Value Investors Buy Now?
Investors interested in stocks from the Electronics - Semiconductors sector have probably already heard of ASE Technology Hldg (ASX) and Synaptics (SYNA). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. 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.
Currently, both ASE Technology Hldg and Synaptics are holding a Zacks Rank of # 2 (Buy). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. But this is just one piece of the puzzle 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.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
ASX currently has a forward P/E ratio of 12.52, while SYNA has a forward P/E of 18.87. We also note that ASX has a PEG ratio of 0.55. 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. SYNA currently has a PEG ratio of 1.89.
Another notable valuation metric for ASX is its P/B ratio of 2.14. 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, SYNA has a P/B of 6.78.
These are just a few of the metrics contributing to ASX's Value grade of A and SYNA's Value grade of D.
Both ASX and SYNA 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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ASE Technology Holding Co., Ltd. (ASX) : Free Stock Analysis Report
Synaptics Incorporated (SYNA) : Free Stock Analysis Report
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