Is AU Optronics (AUOTY) Stock Undervalued Right Now?
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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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.
One company value investors might notice is AU Optronics (AUOTY). AUOTY is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. AUOTY has a P/S ratio of 0.46. This compares to its industry's average P/S of 1.24.
Finally, investors will want to recognize that AUOTY has a P/CF ratio of 7.45. 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. AUOTY's current P/CF looks attractive when compared to its industry's average P/CF of 19.75. Over the past 52 weeks, AUOTY's P/CF has been as high as 8.03 and as low as 2.80, with a median of 5.67.
These figures are just a handful of the metrics value investors tend to look at, but they help show that AU Optronics is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, AUOTY feels like a great value stock at the moment.
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