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Are Investors Undervaluing Diodes (DIOD) Right Now?

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The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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.

Diodes (DIOD - Free Report) is a stock many investors are watching right now. DIOD is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A.

Another notable valuation metric for DIOD is its P/B ratio of 2.06. 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. This company's current P/B looks solid when compared to its industry's average P/B of 5.62. Within the past 52 weeks, DIOD's P/B has been as high as 2.22 and as low as 1.47, with a median of 1.85.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. DIOD has a P/S ratio of 1.53. This compares to its industry's average P/S of 2.29.

Finally, our model also underscores that DIOD has a P/CF ratio of 9.49. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 16.57. Over the past year, DIOD's P/CF has been as high as 16.92 and as low as 7.34, with a median of 11.95.

Value investors will likely look at more than just these metrics, but the above data helps show that Diodes is likely undervalued currently. And when considering the strength of its earnings outlook, DIOD sticks out at as one of the market's strongest value stocks.


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