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Is United Microelectronics Corporation (UMC) a Great Value Stock Right Now?

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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One company value investors might notice is United Microelectronics Corporation (UMC - Free Report) . UMC is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 13.57, while its industry has an average P/E of 20.68. UMC's Forward P/E has been as high as 20.05 and as low as 12.87, with a median of 15.09, all within the past year.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. UMC has a P/S ratio of 4.01. This compares to its industry's average P/S of 4.25.

Finally, we should also recognize that UMC has a P/CF ratio of 9.54. 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. UMC's P/CF compares to its industry's average P/CF of 29.21. Within the past 12 months, UMC's P/CF has been as high as 11.04 and as low as 5.07, with a median of 8.60.

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


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