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HPE or SIMO: Which Is the Better Value Stock Right Now?
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Investors interested in stocks from the Computer - Integrated Systems sector have probably already heard of Hewlett Packard Enterprise (HPE - Free Report) and Silicon Motion (SIMO - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 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, both Hewlett Packard Enterprise and Silicon Motion are sporting a Zacks Rank of #2 (Buy). Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. 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.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
HPE currently has a forward P/E ratio of 10.80, while SIMO has a forward P/E of 21.63. We also note that HPE has a PEG ratio of 1.86. 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. SIMO currently has a PEG ratio of 10.20.
Another notable valuation metric for HPE is its P/B ratio of 1.12. 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, SIMO has a P/B of 3.25.
These are just a few of the metrics contributing to HPE's Value grade of A and SIMO's Value grade of D.
Both HPE and SIMO are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that HPE is the superior value option right now.
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HPE or SIMO: Which Is the Better Value Stock Right Now?
Investors interested in stocks from the Computer - Integrated Systems sector have probably already heard of Hewlett Packard Enterprise (HPE - Free Report) and Silicon Motion (SIMO - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 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, both Hewlett Packard Enterprise and Silicon Motion are sporting a Zacks Rank of #2 (Buy). Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. 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.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
HPE currently has a forward P/E ratio of 10.80, while SIMO has a forward P/E of 21.63. We also note that HPE has a PEG ratio of 1.86. 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. SIMO currently has a PEG ratio of 10.20.
Another notable valuation metric for HPE is its P/B ratio of 1.12. 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, SIMO has a P/B of 3.25.
These are just a few of the metrics contributing to HPE's Value grade of A and SIMO's Value grade of D.
Both HPE and SIMO are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that HPE is the superior value option right now.