Many investors like to look for value in stocks, but this can be very tough to define. There is great debate regarding which metrics are the best to focus on in this regard, and which are not really quality indicators of future performance. Fortunately, with our new style score system we have identified the key statistics to pay close attention to and thus which stocks might be the best for value investors in the near term.
This method discovered several great candidates for value-oriented investors, but today let’s focus on AU Optronics Corp. as this stock is looking especially impressive right now. And while there are numerous reasons why this is the case, we have highlighted three of the most vital reasons for AUO’s status as a solid value stock below:
PEG Ratio for AUO
While earnings are definitely important, it is vital to know how much you are paying for the growth of earnings as well. One can easily do that with the PEG ratio as this metric looks to show investors how much they are paying for each unit of earnings growth.
AUO manages to impress on this front as well, as the company’s PEG is just 0.58, suggesting that AU Optronicsis trading as a relative bargain right now. This is particularly the case when you compare this PEG to the industry, as the broader segment has an average PEG of 1.28 in comparison.
Price/Cash Flow for AU Optronics
An often overlooked ratio that can still be a great indicator of value is the price/cash flow metric. This reading is preferred by some since it avoids amortization and depreciation concerns and can give a more accurate picture of the financial health in a business.
The P/CF ratio for AUO comes in at 4.66, and since investors are generally looking for a reading under 20 here, this is pretty good news. Meanwhile, we should also point out that the industry average for this metric is 7.68, so Company Name has its peers beat in this regard too.
AUO Earnings Estimate Revisions Moving in the Right Direction
The solid value ratios outlined in the preceding paragraphs might be enough for some investors, but we should also note that the earnings estimate revisions have been trending in a positive direction as well. Analysts who follow AUO stock have been raising their estimates for the company lately, meaning that the EPS picture is looking a bit more favorably for Company Name now.
Over the past 30 days, 1 earnings estimate has gone higher compared to none lower for the full year, while we are also seeing that 1 estimate has moved upwards with no downward revision for the next year time frame too. These revisions have helped to boost the consensus estimate as 30 days ago AUO was expected to post earnings of 3 cents per share for the full year though today it looks to have EPS of 16 cents for the full year.
Bottom Line
For the reasons detailed above, investors shouldn’t be surprised to read that we have AUO as a stock with a Value Score of ‘A’ and a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
So if you are a value investor, definitely keep AUO on your short list as this looks to be a stock that is very well-positioned for gains in the near term.
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Starting today, for the next month, you can follow all Zacks' private buys and sells in real time. Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Click here for Zacks' private trades >>
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Looking for a Top Value Stock? 3 Reasons Why AU Optronics (AUO) is an Excellent Choice
Many investors like to look for value in stocks, but this can be very tough to define. There is great debate regarding which metrics are the best to focus on in this regard, and which are not really quality indicators of future performance. Fortunately, with our new style score system we have identified the key statistics to pay close attention to and thus which stocks might be the best for value investors in the near term.
This method discovered several great candidates for value-oriented investors, but today let’s focus on AU Optronics Corp. as this stock is looking especially impressive right now. And while there are numerous reasons why this is the case, we have highlighted three of the most vital reasons for AUO’s status as a solid value stock below:
PEG Ratio for AUO
While earnings are definitely important, it is vital to know how much you are paying for the growth of earnings as well. One can easily do that with the PEG ratio as this metric looks to show investors how much they are paying for each unit of earnings growth.
AUO manages to impress on this front as well, as the company’s PEG is just 0.58, suggesting that AU Optronicsis trading as a relative bargain right now. This is particularly the case when you compare this PEG to the industry, as the broader segment has an average PEG of 1.28 in comparison.
AU OPTRONCS-ADR PEG Ratio (TTM)
AU OPTRONCS-ADR PEG Ratio (TTM) | AU OPTRONCS-ADR Quote
Price/Cash Flow for AU Optronics
An often overlooked ratio that can still be a great indicator of value is the price/cash flow metric. This reading is preferred by some since it avoids amortization and depreciation concerns and can give a more accurate picture of the financial health in a business.
The P/CF ratio for AUO comes in at 4.66, and since investors are generally looking for a reading under 20 here, this is pretty good news. Meanwhile, we should also point out that the industry average for this metric is 7.68, so Company Name has its peers beat in this regard too.
AUO Earnings Estimate Revisions Moving in the Right Direction
The solid value ratios outlined in the preceding paragraphs might be enough for some investors, but we should also note that the earnings estimate revisions have been trending in a positive direction as well. Analysts who follow AUO stock have been raising their estimates for the company lately, meaning that the EPS picture is looking a bit more favorably for Company Name now.
Over the past 30 days, 1 earnings estimate has gone higher compared to none lower for the full year, while we are also seeing that 1 estimate has moved upwards with no downward revision for the next year time frame too. These revisions have helped to boost the consensus estimate as 30 days ago AUO was expected to post earnings of 3 cents per share for the full year though today it looks to have EPS of 16 cents for the full year.
Bottom Line
For the reasons detailed above, investors shouldn’t be surprised to read that we have AUO as a stock with a Value Score of ‘A’ and a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
So if you are a value investor, definitely keep AUO on your short list as this looks to be a stock that is very well-positioned for gains in the near term.
Zacks’ Best Private Investment Ideas
While we are happy to share many articles like this on the website, our best recommendations and most in-depth research are not available to the public.
Starting today, for the next month, you can follow all Zacks' private buys and sells in real time. Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Click here for Zacks' private trades >>