While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. 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 to watch right now is Alpha and Omega Semiconductor (AOSL). AOSL is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 15.48, while its industry has an average P/E of 16.30. Over the last 12 months, AOSL's Forward P/E has been as high as 16.06 and as low as 5.21, with a median of 9.64.
Finally, investors will want to recognize that AOSL has a P/CF ratio of 7.37. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. AOSL's current P/CF looks attractive when compared to its industry's average P/CF of 28.54. AOSL's P/CF has been as high as 9.92 and as low as 3.76, with a median of 7.71, all within the past year.
These are only a few of the key metrics included in Alpha and Omega Semiconductor's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, AOSL looks like an impressive value stock at the moment.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Alpha and Omega Semiconductor Limited (AOSL) : Free Stock Analysis Report
To read this article on Zacks.com click here.