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Are Investors Undervaluing DIALOG SEMICON (DLGNF) Right Now?

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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.

DIALOG SEMICON is a stock many investors are watching right now. DLGNF is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 12, while its industry has an average P/E of 13.82. DLGNF's Forward P/E has been as high as 19.19 and as low as 10.67, with a median of 14.98, 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. DLGNF has a P/S ratio of 2.37. This compares to its industry's average P/S of 2.72.

Finally, investors will want to recognize that DLGNF has a P/CF ratio of 12.17. 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. Over the past year, DLGNF's P/CF has been as high as 15.34 and as low as 3.77, with a median of 9.32.

These are just a handful of the figures considered in DIALOG SEMICON's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that DLGNF is an impressive value stock right now.

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