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ATEYY vs. ORBK: Which Stock Is the Better Value Option?

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Investors looking for stocks in the Electronics - Measuring Instruments sector might want to consider either Advantest Corp. (ATEYY - Free Report) or Orbotech . But which of these two companies is the best option for those looking for undervalued stocks? 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Advantest Corp. has a Zacks Rank of #1 (Strong Buy), while Orbotech has a Zacks Rank of #3 (Hold) right now. This means that ATEYY's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.

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 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.

ATEYY currently has a forward P/E ratio of 9.73, while ORBK has a forward P/E of 16.67. We also note that ATEYY has a PEG ratio of 0.63. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. ORBK currently has a PEG ratio of 0.95.

Another notable valuation metric for ATEYY is its P/B ratio of 2.63. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, ORBK has a P/B of 2.88.

Based on these metrics and many more, ATEYY holds a Value grade of A, while ORBK has a Value grade of C.

ATEYY has seen stronger estimate revision activity and sports more attractive valuation metrics than ORBK, so it seems like value investors will conclude that ATEYY is the superior option right now.


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