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LPL vs. IMMR: Which Stock Is the Better Value Option?

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Investors interested in stocks from the Computer - Peripheral Equipment sector have probably already heard of LG Display (LPL - Free Report) and Immersion (IMMR - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

LG Display and Immersion are sporting Zacks Ranks of #1 (Strong Buy) and #2 (Buy), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that LPL has an improving earnings outlook. 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.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

LPL currently has a forward P/E ratio of 5.08, while IMMR has a forward P/E of 13.01. We also note that LPL has a PEG ratio of 0.16. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. IMMR currently has a PEG ratio of 0.87.

Another notable valuation metric for LPL is its P/B ratio of 0.62. 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, IMMR has a P/B of 2.63.

These metrics, and several others, help LPL earn a Value grade of A, while IMMR has been given a Value grade of D.

LPL is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that LPL is likely the superior value option right now.


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