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ASX vs. LSCC: Which Stock Is the Better Value Option?

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Investors interested in Electronics - Semiconductors stocks are likely familiar with ASE Technology Hldg (ASX - Free Report) and Lattice Semiconductor (LSCC - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Right now, ASE Technology Hldg is sporting a Zacks Rank of #2 (Buy), while Lattice Semiconductor has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that ASX likely has seen a stronger improvement to its earnings outlook than LSCC has recently. However, value investors will care about much more than just this.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

ASX currently has a forward P/E ratio of 11.15, while LSCC has a forward P/E of 45.06. We also note that ASX has a PEG ratio of 0.40. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. LSCC currently has a PEG ratio of 1.31.

Another notable valuation metric for ASX is its P/B ratio of 1.89. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, LSCC has a P/B of 9.50.

These metrics, and several others, help ASX earn a Value grade of A, while LSCC has been given a Value grade of F.

ASX 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 ASX is likely the superior value option right now.


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