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AGCO vs. LNN: Which Stock Should Value Investors Buy Now?

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Investors with an interest in Manufacturing - Farm Equipment stocks have likely encountered both Agco (AGCO - Free Report) and Lindsay (LNN - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Agco and Lindsay are sporting Zacks Ranks of #1 (Strong Buy) and #4 (Sell), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that AGCO has an improving earnings outlook. But this is just one factor that value investors are interested in.

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.

AGCO currently has a forward P/E ratio of 8.88, while LNN has a forward P/E of 18.25. We also note that AGCO has a PEG ratio of 0.84. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. LNN currently has a PEG ratio of 0.96.

Another notable valuation metric for AGCO is its P/B ratio of 2.35. 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, LNN has a P/B of 3.26.

These are just a few of the metrics contributing to AGCO's Value grade of B and LNN's Value grade of C.

AGCO has seen stronger estimate revision activity and sports more attractive valuation metrics than LNN, so it seems like value investors will conclude that AGCO is the superior option right now.


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