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Should Value Investors Buy United Microelectronics (UMC) Stock?
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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, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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.
One stock to keep an eye on is United Microelectronics (UMC - Free Report) . UMC is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 10.91, which compares to its industry's average of 18.62. UMC's Forward P/E has been as high as 20.05 and as low as 10.62, with a median of 13.93, all within the past year.
We also note that UMC holds a PEG ratio of 0.39. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. UMC's industry currently sports an average PEG of 0.64. Over the last 12 months, UMC's PEG has been as high as 0.90 and as low as 0.38, with a median of 0.70.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. UMC has a P/S ratio of 3.3. This compares to its industry's average P/S of 3.41.
Finally, investors will want to recognize that UMC has a P/CF ratio of 8.24. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. UMC's P/CF compares to its industry's average P/CF of 30.06. Within the past 12 months, UMC's P/CF has been as high as 11.04 and as low as 7.35, 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 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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Should Value Investors Buy United Microelectronics (UMC) Stock?
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, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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.
One stock to keep an eye on is United Microelectronics (UMC - Free Report) . UMC is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 10.91, which compares to its industry's average of 18.62. UMC's Forward P/E has been as high as 20.05 and as low as 10.62, with a median of 13.93, all within the past year.
We also note that UMC holds a PEG ratio of 0.39. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. UMC's industry currently sports an average PEG of 0.64. Over the last 12 months, UMC's PEG has been as high as 0.90 and as low as 0.38, with a median of 0.70.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. UMC has a P/S ratio of 3.3. This compares to its industry's average P/S of 3.41.
Finally, investors will want to recognize that UMC has a P/CF ratio of 8.24. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. UMC's P/CF compares to its industry's average P/CF of 30.06. Within the past 12 months, UMC's P/CF has been as high as 11.04 and as low as 7.35, 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 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.