Back to top

Image: Bigstock

Should Value Investors Buy DIALOG SEMICON (DLGNF) Stock?

Read MoreHide Full Article

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One stock to keep an eye on is DIALOG SEMICON . DLGNF 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 11.98, which compares to its industry's average of 13.71. DLGNF's Forward P/E has been as high as 19.19 and as low as 10.67, with a median of 14.49, all within the past year.

Finally, investors will want to recognize that DLGNF has a P/CF ratio of 19.71. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. DLGNF's P/CF compares to its industry's average P/CF of 26.18. DLGNF's P/CF has been as high as 21.63 and as low as 3.77, with a median of 9.37, all within the past year.

Value investors will likely look at more than just these metrics, but the above data helps show that DIALOG SEMICON is likely undervalued currently. And when considering the strength of its earnings outlook, DLGNF sticks out at as one of the market's strongest value stocks.

Published in