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Should Value Investors Buy Synaptics (SYNA) Stock?

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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One company to watch right now is Synaptics (SYNA - Free Report) . SYNA is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 13.96, which compares to its industry's average of 16.06. Over the past 52 weeks, SYNA's Forward P/E has been as high as 22.06 and as low as 7.63, with a median of 13.38.

Investors should also note that SYNA holds a PEG ratio of 1.40. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. SYNA's industry currently sports an average PEG of 1.48. SYNA's PEG has been as high as 1.65 and as low as 1.32, with a median of 1.43, all within the past year.

Investors should also recognize that SYNA has a P/B ratio of 2.93. 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 stock's P/B looks attractive against its industry's average P/B of 8.50. SYNA's P/B has been as high as 4.09 and as low as 1.31, with a median of 2.86, over the past year.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. SYNA has a P/S ratio of 1.57. This compares to its industry's average P/S of 2.36.

Finally, we should also recognize that SYNA has a P/CF ratio of 23.94. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 28.54. Within the past 12 months, SYNA's P/CF has been as high as 29.05 and as low as 6.24, with a median of 19.92.

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


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