Investors looking for stocks in the Electronics - Semiconductors sector might want to consider either Cirrus Logic (CRUS) or Pixelworks (PXLW). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Currently, both Cirrus Logic and Pixelworks are holding a Zacks Rank of # 2 (Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. However, value investors will care about much more than just this.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
CRUS currently has a forward P/E ratio of 14.01, while PXLW has a forward P/E of 66.53. We also note that CRUS has a PEG ratio of 0.93. 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. PXLW currently has a PEG ratio of 3.33.
Another notable valuation metric for CRUS is its P/B ratio of 2.42. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, PXLW has a P/B of 4.26.
These metrics, and several others, help CRUS earn a Value grade of B, while PXLW has been given a Value grade of D.
Both CRUS and PXLW are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that CRUS is the superior value option right now.
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Cirrus Logic, Inc. (CRUS): Free Stock Analysis Report
Pixelworks, Inc. (PXLW): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
