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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader 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.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One stock to keep an eye on is TDK (TTDKY - Free Report) . TTDKY is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 11.99 right now. For comparison, its industry sports an average P/E of 18.16. Over the past year, TTDKY's Forward P/E has been as high as 21.71 and as low as 11.73, with a median of 14.70.
Investors should also note that TTDKY holds a PEG ratio of 0.78. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. TTDKY's industry currently sports an average PEG of 1.67. Within the past year, TTDKY's PEG has been as high as 1.27 and as low as 0.50, with a median of 0.79.
Investors should also recognize that TTDKY has a P/B ratio of 1.58. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 3.63. TTDKY's P/B has been as high as 2.14 and as low as 1.30, with a median of 1.61, over 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 prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. TTDKY has a P/S ratio of 1.01. This compares to its industry's average P/S of 1.55.
Finally, investors will want to recognize that TTDKY has a P/CF ratio of 6.12. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 14.80. TTDKY's P/CF has been as high as 10.21 and as low as 5.15, with a median of 6.62, all within the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that TDK is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, TTDKY feels like a great value stock at the moment.
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Are Investors Undervaluing TDK (TTDKY) Right Now?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader 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.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One stock to keep an eye on is TDK (TTDKY - Free Report) . TTDKY is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 11.99 right now. For comparison, its industry sports an average P/E of 18.16. Over the past year, TTDKY's Forward P/E has been as high as 21.71 and as low as 11.73, with a median of 14.70.
Investors should also note that TTDKY holds a PEG ratio of 0.78. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. TTDKY's industry currently sports an average PEG of 1.67. Within the past year, TTDKY's PEG has been as high as 1.27 and as low as 0.50, with a median of 0.79.
Investors should also recognize that TTDKY has a P/B ratio of 1.58. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 3.63. TTDKY's P/B has been as high as 2.14 and as low as 1.30, with a median of 1.61, over 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 prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. TTDKY has a P/S ratio of 1.01. This compares to its industry's average P/S of 1.55.
Finally, investors will want to recognize that TTDKY has a P/CF ratio of 6.12. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 14.80. TTDKY's P/CF has been as high as 10.21 and as low as 5.15, with a median of 6.62, all within the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that TDK is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, TTDKY feels like a great value stock at the moment.