Back to top

Image: Bigstock

SHYF or RACE: Which Is the Better Value Stock Right Now?

Read MoreHide Full Article

Investors interested in Automotive - Original Equipment stocks are likely familiar with The Shyft Group (SHYF - Free Report) and Ferrari (RACE - 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.

Currently, both The Shyft Group and Ferrari are holding a Zacks Rank of # 2 (Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. But this is only part of the picture 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 Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

SHYF currently has a forward P/E ratio of 16.73, while RACE has a forward P/E of 59.63. We also note that SHYF has a PEG ratio of 1.12. 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. RACE currently has a PEG ratio of 4.95.

Another notable valuation metric for SHYF is its P/B ratio of 3.88. 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, RACE has a P/B of 23.02.

These metrics, and several others, help SHYF earn a Value grade of B, while RACE has been given a Value grade of D.

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


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Ferrari N.V. (RACE) - free report >>

The Shyft Group, Inc. (SHYF) - free report >>

Published in