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Sony Corporation (ADR) (SNE): Here’s What You Should Know

Korea-based Samsung now appears to be challenging for the pole position in global electronics. The firm, which produces everything from televisions to tablets, phones, cameras, PC peripherals, and laptops, now has the largest market share in the smartphone arena, and is still growing. The company’s enormously popular Galaxy phones have flooded the market, driving much of its $7.9 billion operating profit for the first quarter. Also the world’s largest producer of televisions, the firm reported decreasing demand for these products due to a seasonal slump, but expects sales to pick up in the second half of the year.

Valuations and Metrics

In no small part due to its poor performance, Sony Corporation (ADR) (NYSE:SNE) is a very inexpensive stock at the moment. While the P/E ratio is currently negative, the price-to-book is only 0.71. For comparison, Apple Inc. (NASDAQ:AAPL) trades at 3.21 times book value and Samsung at 1.59. The price-to-sales is even lower at only 0.21. The company’s operating margin is fairly grim at around 0.5% and the return on equity is also poor at -9.71%. On the whole, the company’s fundamentals aren’t too strong.

The Bottom Line

The struggling Japanese electronics giant Sony Corporation (ADR) (NYSE:SNE) has finally managed to turn things around for the fiscal year, delivering its first full-year profit in five years. These results were in no small part due to the devaluation of the yen, although cost cutting measures also helped the company’s bottom line. However, it remains to be seen how this turnaround project plays out over this fiscal year, and the company will have to keep turning a profit in order to restore shareholder confidence.

Daniel James has no position in any stocks mentioned. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple.

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