CRUS vs. SOTK: Which Stock Should Value Investors Buy Now?
Investors interested in stocks from the Electronics - Semiconductors sector have probably already heard of Cirrus Logic (CRUS) and SonoTek Corporation (SOTK). 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.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Currently, both Cirrus Logic and SonoTek Corporation are holding a Zacks Rank of # 2 (Buy). Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. But this is just one factor that value investors are interested in.
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.
CRUS currently has a forward P/E ratio of 15.64, while SOTK has a forward P/E of 83.43. We also note that CRUS has a PEG ratio of 1.67. 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. SOTK currently has a PEG ratio of 6.95.
Another notable valuation metric for CRUS is its P/B ratio of 3.16. 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, SOTK has a P/B of 7.19.
These are just a few of the metrics contributing to CRUS's Value grade of B and SOTK's Value grade of F.
Both CRUS and SOTK are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that CRUS is the superior value option right now.
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Cirrus Logic, Inc. (CRUS) : Free Stock Analysis Report
SonoTek Corporation (SOTK) : Free Stock Analysis Report
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