Investors interested in Electronics - Semiconductors stocks are likely familiar with Silicon Motion (SIMO Quick QuoteSIMO - Free Report) and Lattice Semiconductor (LSCC Quick QuoteLSCC - Free Report) . 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Silicon Motion and Lattice Semiconductor are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that SIMO has an improving earnings outlook. But this is just one piece of the puzzle for value investors.

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 Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

SIMO currently has a forward P/E ratio of 13.51, while LSCC has a forward P/E of 35.90. We also note that SIMO has a PEG ratio of 1.93. 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. LSCC currently has a PEG ratio of 3.59.

Another notable valuation metric for SIMO is its P/B ratio of 2.76. 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 8.46.

These are just a few of the metrics contributing to SIMO's Value grade of B and LSCC's Value grade of F.

SIMO 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 SIMO is likely the superior value option right now.