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ACLS vs. COHU: Which Stock Is the Better Value Option?

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Investors interested in Electronics - Manufacturing Machinery stocks are likely familiar with Axcelis Technologies (ACLS - Free Report) and Cohu (COHU - Free Report) . 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Right now, both Axcelis Technologies and Cohu are sporting a Zacks Rank of # 2 (Buy). This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. But this is only part of the picture for value investors.

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.

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.

ACLS currently has a forward P/E ratio of 14.64, while COHU has a forward P/E of 16.57. We also note that ACLS has a PEG ratio of 0.73. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. COHU currently has a PEG ratio of 2.07.

Another notable valuation metric for ACLS is its P/B ratio of 1.77. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, COHU has a P/B of 2.43.

These are just a few of the metrics contributing to ACLS's Value grade of B and COHU's Value grade of D.

Both ACLS and COHU are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that ACLS is the superior value option right now.


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Cohu, Inc. (COHU) - free report >>

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