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Synaptics Incorporated (SYNA) - free report >>
Silicon Motion Technology Corporation (SIMO) - free report >>
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Synaptics Incorporated (SYNA) - free report >>
Silicon Motion Technology Corporation (SIMO) - free report >>
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SIMO vs. SYNA: Which Stock Is the Better Value Option?
Investors interested in stocks from the Electronics - Semiconductors sector have probably already heard of Silicon Motion (SIMO - Free Report) and Synaptics (SYNA - 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.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Silicon Motion and Synaptics are both sporting a Zacks Rank of # 2 (Buy) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. But this is just one piece of the puzzle 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.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
SIMO currently has a forward P/E ratio of 12.13, while SYNA has a forward P/E of 18.14. We also note that SIMO has a PEG ratio of 1.52. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. SYNA currently has a PEG ratio of 1.81.
Another notable valuation metric for SIMO is its P/B ratio of 3.88. 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, SYNA has a P/B of 6.60.
These are just a few of the metrics contributing to SIMO's Value grade of B and SYNA's Value grade of C.
Both SIMO and SYNA are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that SIMO is the superior value option right now.