Back to top

Image: Bigstock

Should Value Investors Buy DAQO New Energy (DQ) Stock?

Read MoreHide Full Article

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.

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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

DAQO New Energy (DQ - Free Report) is a stock many investors are watching right now. DQ is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value.

We should also highlight that DQ has a P/B ratio of 1.35. The P/B ratio pits a stock's market value against 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 3.55. Over the past year, DQ's P/B has been as high as 4.14 and as low as 0.84, with a median of 1.35.

Finally, we should also recognize that DQ has a P/CF ratio of 3.62. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 9.08. Over the past year, DQ's P/CF has been as high as 10.35 and as low as 2.25, with a median of 4.16.

These are just a handful of the figures considered in DAQO New Energy's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that DQ is an impressive value stock right now.


In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


DAQO New Energy Corp. (DQ) - free report >>

Published in