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ASX vs. AMD: Which Stock Is the Better Value Option?

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Investors interested in Electronics - Semiconductors stocks are likely familiar with ASE Technology Hldg (ASX - Free Report) and Advanced Micro Devices (AMD - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Both ASE Technology Hldg and Advanced Micro Devices have a Zacks Rank of # 2 (Buy) right now. Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. But this is only part of the picture for value investors.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its 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.

ASX currently has a forward P/E ratio of 10.07, while AMD has a forward P/E of 57.48. We also note that ASX has a PEG ratio of 0.37. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. AMD currently has a PEG ratio of 1.24.

Another notable valuation metric for ASX is its P/B ratio of 1.86. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, AMD has a P/B of 25.80.

These are just a few of the metrics contributing to ASX's Value grade of A and AMD's Value grade of D.

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


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