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Are Investors Undervaluing AAC Technologies (AACAY) Right Now?

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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, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One stock to keep an eye on is AAC Technologies (AACAY - Free Report) . AACAY 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 14.56 right now. For comparison, its industry sports an average P/E of 19.65. Over the last 12 months, AACAY's Forward P/E has been as high as 22.32 and as low as -17.94, with a median of 13.12.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. AACAY has a P/S ratio of 0.89. This compares to its industry's average P/S of 1.25.

Investors could also keep in mind TDK (TTDKY - Free Report) , an Electronics - Miscellaneous Components stock with a Zacks Rank of # 1 (Strong Buy) and Value grade of A.

TDK is trading at a forward earnings multiple of 10.17 at the moment, with a PEG ratio of 0.83. This compares to its industry's average P/E of 19.65 and average PEG ratio of 2.34.


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