Investors interested in Semiconductor - Analog and Mixed stocks are likely familiar with Magnachip (MX) and Monolithic Power (MPWR). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, both Magnachip and Monolithic Power are holding a Zacks Rank of # 2 (Buy). Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. But this is just one factor that value investors are interested in.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its 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.
MX currently has a forward P/E ratio of 16.55, while MPWR has a forward P/E of 77.25. We also note that MX has a PEG ratio of 0.61. 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. MPWR currently has a PEG ratio of 3.09.
Another notable valuation metric for MX is its P/B ratio of 1.92. 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. By comparison, MPWR has a P/B of 21.93.
Based on these metrics and many more, MX holds a Value grade of B, while MPWR has a Value grade of F.
Both MX and MPWR are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that MX is the superior value option right now.
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Magnachip Semiconductor Corp. (MX) : Free Stock Analysis Report
Monolithic Power Systems, Inc. (MPWR) : Free Stock Analysis Report
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