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Is DAQO New Energy (DQ) a Great Value Stock Right Now?

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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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 DAQO New Energy (DQ - Free Report) . DQ is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value.

Another valuation metric that we should highlight is DQ's P/B ratio of 1.23. 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. DQ's current P/B looks attractive when compared to its industry's average P/B of 2.63. DQ's P/B has been as high as 7.22 and as low as 0.99, with a median of 3.74, over the past year.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. DQ has a P/S ratio of 1.12. This compares to its industry's average P/S of 1.71.

Ingevity (NGVT - Free Report) may be another strong Chemical - Specialty stock to add to your shortlist. NGVT is a # 2 (Buy) stock with a Value grade of A.

Ingevity sports a P/B ratio of 3.73 as well; this compares to its industry's price-to-book ratio of 2.63. In the past 52 weeks, NGVT's P/B has been as high as 5.41, as low as 3.30, with a median of 4.52.

These are only a few of the key metrics included in DAQO New Energy and Ingevity strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, DQ and NGVT look like an impressive value stock at the moment.


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