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FERG vs. ATLKY: Which Stock Is the Better Value Option?
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Investors interested in Manufacturing - General Industrial stocks are likely familiar with Wolseley PLC (FERG - Free Report) and Atlas Copco AB (ATLKY - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Wolseley PLC has a Zacks Rank of #2 (Buy), while Atlas Copco AB has a Zacks Rank of #3 (Hold) right now. This means that FERG's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle for value investors.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
FERG currently has a forward P/E ratio of 13.06, while ATLKY has a forward P/E of 22.87. We also note that FERG has a PEG ratio of 0.95. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. ATLKY currently has a PEG ratio of 3.47.
Another notable valuation metric for FERG is its P/B ratio of 5.38. 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, ATLKY has a P/B of 6.47.
Based on these metrics and many more, FERG holds a Value grade of B, while ATLKY has a Value grade of C.
FERG 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 FERG is likely the superior value option right now.
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FERG vs. ATLKY: Which Stock Is the Better Value Option?
Investors interested in Manufacturing - General Industrial stocks are likely familiar with Wolseley PLC (FERG - Free Report) and Atlas Copco AB (ATLKY - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Wolseley PLC has a Zacks Rank of #2 (Buy), while Atlas Copco AB has a Zacks Rank of #3 (Hold) right now. This means that FERG's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle for value investors.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
FERG currently has a forward P/E ratio of 13.06, while ATLKY has a forward P/E of 22.87. We also note that FERG has a PEG ratio of 0.95. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. ATLKY currently has a PEG ratio of 3.47.
Another notable valuation metric for FERG is its P/B ratio of 5.38. 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, ATLKY has a P/B of 6.47.
Based on these metrics and many more, FERG holds a Value grade of B, while ATLKY has a Value grade of C.
FERG 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 FERG is likely the superior value option right now.