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Are Investors Undervaluing TDK (TTDKY) Right Now?

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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

TDK (TTDKY - Free Report) is a stock many investors are watching right now. TTDKY is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock is trading with a P/E ratio of 12.30, which compares to its industry's average of 20.80. Over the past 52 weeks, TTDKY's Forward P/E has been as high as 15.61 and as low as 9.24, with a median of 11.55.

TTDKY is also sporting a PEG ratio of 1.05. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. TTDKY's PEG compares to its industry's average PEG of 2.48. TTDKY's PEG has been as high as 1.08 and as low as 0.43, with a median of 0.80, all within the past year.

Investors should also recognize that TTDKY has a P/B ratio of 1.25. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. TTDKY's current P/B looks attractive when compared to its industry's average P/B of 3.55. Within the past 52 weeks, TTDKY's P/B has been as high as 1.64 and as low as 0.98, with a median of 1.22.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by 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. TTDKY has a P/S ratio of 0.86. This compares to its industry's average P/S of 1.36.

Finally, our model also underscores that TTDKY has a P/CF ratio of 4.70. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 14.41. Over the past 52 weeks, TTDKY's P/CF has been as high as 6.74 and as low as 3.74, with a median of 4.65.

These are just a handful of the figures considered in TDK's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that TTDKY is an impressive value stock right now.


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