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TTDKY or OSIS: Which Is the Better Value Stock Right Now?

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Investors interested in stocks from the Electronics - Miscellaneous Components sector have probably already heard of TDK Corp. (TTDKY - Free Report) and OSI Systems (OSIS - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. 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.

TDK Corp. and OSI Systems are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that TTDKY has an improving earnings outlook. But this is just one factor that value investors are interested in.

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.

TTDKY currently has a forward P/E ratio of 16.16, while OSIS has a forward P/E of 17.72. We also note that TTDKY has a PEG ratio of 0.85. 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. OSIS currently has a PEG ratio of 1.61.

Another notable valuation metric for TTDKY is its P/B ratio of 1.73. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, OSIS has a P/B of 3.15.

These are just a few of the metrics contributing to TTDKY's Value grade of B and OSIS's Value grade of C.

TTDKY is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that TTDKY is likely the superior value option right now.


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