Investors looking for stocks in the Computer – Peripheral Equipment sector might want to consider either LG Display (LPL) or Immersion (IMMR). But which of these two companies is the best option for those looking for undervalued stocks? Let’s take a closer look.
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 Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
LG Display has a Zacks Rank of #2 (Buy), while Immersion has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that LPL likely has seen a stronger improvement to its earnings outlook than IMMR has recently. But this is only part of the picture for value investors.
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.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
LPL currently has a forward P/E ratio of 11.36, while IMMR has a forward P/E of 20.74. We also note that LPL has a PEG ratio of 0.25. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company’s expected earnings growth rate. IMMR currently has a PEG ratio of 1.38.
Another notable valuation metric for LPL is its P/B ratio of 0.71. 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. For comparison, IMMR has a P/B of 6.31.
Based on these metrics and many more, LPL holds a Value grade of A, while IMMR has a Value grade of F.
LPL has seen stronger estimate revision activity and sports more attractive valuation metrics than IMMR, so it seems like value investors will conclude that LPL is the superior option right now.
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