SIMO or NVMI: Which Is the Better Value Stock Right Now?
Investors interested in stocks from the Electronics - Semiconductors sector have probably already heard of Silicon Motion (SIMO) and Nova Ltd. (NVMI). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 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.
Silicon Motion and Nova Ltd. are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that SIMO is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies 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.
SIMO currently has a forward P/E ratio of 18.74, while NVMI has a forward P/E of 27.47. We also note that SIMO has a PEG ratio of 2.68. 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. NVMI currently has a PEG ratio of 5.07.
Another notable valuation metric for SIMO is its P/B ratio of 2.70. 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, NVMI has a P/B of 5.88.
These metrics, and several others, help SIMO earn a Value grade of B, while NVMI has been given a Value grade of F.
SIMO has seen stronger estimate revision activity and sports more attractive valuation metrics than NVMI, so it seems like value investors will conclude that SIMO is the superior option right now.
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Silicon Motion Technology Corporation (SIMO) : Free Stock Analysis Report
Nova Ltd. (NVMI) : Free Stock Analysis Report
