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ASGN vs. FICO: Which Stock Should Value Investors Buy Now?

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Investors interested in stocks from the Computers - IT Services sector have probably already heard of ASGN Inc (ASGN - Free Report) and Fair Isaac (FICO - 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.

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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

ASGN Inc has a Zacks Rank of #2 (Buy), while Fair Isaac has a Zacks Rank of #4 (Sell) right now. This means that ASGN's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.

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.

ASGN currently has a forward P/E ratio of 15.31, while FICO has a forward P/E of 28.78. We also note that ASGN has a PEG ratio of 1.29. 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. FICO currently has a PEG ratio of 2.88.

Another notable valuation metric for ASGN is its P/B ratio of 3.12. 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, FICO has a P/B of 21.22.

These metrics, and several others, help ASGN earn a Value grade of A, while FICO has been given a Value grade of F.

ASGN sticks out from FICO in both our Zacks Rank and Style Scores models, so value investors will likely feel that ASGN is the better option right now.


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