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SIMO or NVMI: Which Is the Better Value Stock Right Now?

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Investors interested in Electronics - Semiconductors stocks are likely familiar with Silicon Motion (SIMO - Free Report) and Nova Ltd. (NVMI - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. 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 Silicon Motion and Nova Ltd. have 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 only part of the picture 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 highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

SIMO currently has a forward P/E ratio of 11.78, while NVMI has a forward P/E of 22.39. We also note that SIMO has a PEG ratio of 1.31. 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. NVMI currently has a PEG ratio of 2.46.

Another notable valuation metric for SIMO is its P/B ratio of 5.20. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, NVMI has a P/B of 5.71.

These metrics, and several others, help SIMO earn a Value grade of B, while NVMI has been given a Value grade of D.

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


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