Should Value Investors Buy TDK (TTDKY) Stock?
The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
TDK (TTDKY) is a stock many investors are watching right now. TTDKY is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 12.88, which compares to its industry's average of 21.67. TTDKY's Forward P/E has been as high as 13.17 and as low as 9.24, with a median of 10.94, all within the past year.
Investors will also notice that TTDKY has a PEG ratio of 1.21. 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. TTDKY's PEG compares to its industry's average PEG of 2.67. TTDKY's PEG has been as high as 1.23 and as low as 0.43, with a median of 0.98, all within the past year.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. TTDKY has a P/S ratio of 0.96. This compares to its industry's average P/S of 1.59.
Finally, we should also recognize that TTDKY has a P/CF ratio of 6.66. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. TTDKY's current P/CF looks attractive when compared to its industry's average P/CF of 17.84. Over the past 52 weeks, TTDKY's P/CF has been as high as 6.81 and as low as 3.74, with a median of 4.63.
These figures are just a handful of the metrics value investors tend to look at, but they help show that TDK is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, TTDKY feels like a great value stock at the moment.
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TDK Corp. (TTDKY) : Free Stock Analysis Report
