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CBM or TECH: Which Is the Better Value Stock Right Now?

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Investors interested in stocks from the Medical - Biomedical and Genetics sector have probably already heard of Cambrex and Techne (TECH - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Both Cambrex and Techne have a Zacks Rank of # 2 (Buy) right now. This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. But this is just one piece of the puzzle for value investors.

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 grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

CBM currently has a forward P/E ratio of 22.05, while TECH has a forward P/E of 39.95. We also note that CBM has a PEG ratio of 2.21. 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. TECH currently has a PEG ratio of 3.33.

Another notable valuation metric for CBM is its P/B ratio of 2.30. 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. For comparison, TECH has a P/B of 6.90.

Based on these metrics and many more, CBM holds a Value grade of B, while TECH has a Value grade of C.

Both CBM and TECH are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that CBM is the superior value option right now.


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