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Are Investors Undervaluing TDK (TTDKY) Right Now?

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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One company to watch right now is TDK (TTDKY - Free Report) . TTDKY is currently sporting a Zacks Rank #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 15.65, while its industry has an average P/E of 18.70. TTDKY's Forward P/E has been as high as 92.67 and as low as 11.94, with a median of 17.42, all within the past year.

Investors should also note that TTDKY holds a PEG ratio of 0.91. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. TTDKY's PEG compares to its industry's average PEG of 1.52. Over the past 52 weeks, TTDKY's PEG has been as high as 3.58 and as low as 0.51, with a median of 0.74.

We should also highlight that TTDKY has a P/B ratio of 1.67. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 2.62. Over the past 12 months, TTDKY's P/B has been as high as 2.32 and as low as 1.31, with a median of 1.99.

Value investors also use the P/S ratio. The P/S ratio is calculated as price divided by sales. This is a preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. TTDKY has a P/S ratio of 1.39. This compares to its industry's average P/S of 1.5.

Finally, our model also underscores that TTDKY has a P/CF ratio of 8.57. 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. TTDKY's P/CF compares to its industry's average P/CF of 15.21. Over the past 52 weeks, TTDKY's P/CF has been as high as 11.29 and as low as 6.73, with a median of 9.63.

These are just a handful of the figures considered in TDK'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 TTDKY is an impressive value stock right now.


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