OSIS vs. OLED: Which Stock Should Value Investors Buy Now?
Investors interested in stocks from the Electronics - Miscellaneous Components sector have probably already heard of OSI Systems (OSIS) and Universal Display Corp. (OLED). 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.
OSI Systems and Universal Display Corp. are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that OSIS likely has seen a stronger improvement to its earnings outlook than OLED has recently. But this is just one piece of the puzzle for value investors.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether 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.
OSIS currently has a forward P/E ratio of 20.10, while OLED has a forward P/E of 36.14. We also note that OSIS has a PEG ratio of 1.83. 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. OLED currently has a PEG ratio of 2.30.
Another notable valuation metric for OSIS is its P/B ratio of 3.08. 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, OLED has a P/B of 5.07.
These are just a few of the metrics contributing to OSIS's Value grade of B and OLED's Value grade of D.
OSIS has seen stronger estimate revision activity and sports more attractive valuation metrics than OLED, so it seems like value investors will conclude that OSIS is the superior option right now.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
OSI Systems, Inc. (OSIS) : Free Stock Analysis Report
Universal Display Corporation (OLED) : Free Stock Analysis Report
