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FERGY vs. SOTK: Which Stock Is the Better Value Option?

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Investors interested in Manufacturing - General Industrial stocks are likely familiar with Wolseley PLC and SonoTek Corp. (SOTK - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Right now, both Wolseley PLC and SonoTek Corp. are sporting a Zacks Rank of # 2 (Buy). Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. But this is just one piece of the puzzle for value investors.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies 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.

FERGY currently has a forward P/E ratio of 21.02, while SOTK has a forward P/E of 61.43. We also note that FERGY has a PEG ratio of 1.60. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. SOTK currently has a PEG ratio of 4.73.

Another notable valuation metric for FERGY is its P/B ratio of 6.21. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, SOTK has a P/B of 6.34.

These are just a few of the metrics contributing to FERGY's Value grade of B and SOTK's Value grade of F.

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


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