Back to top

Image: Bigstock

SWKH vs. LU: Which Stock Should Value Investors Buy Now?

Read MoreHide Full Article

Investors interested in Financial - Miscellaneous Services stocks are likely familiar with SWK Holdings Corp. (SWKH - Free Report) and Lufax Holding Ltd. Sponsored ADR (LU - 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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Both SWK Holdings Corp. and Lufax Holding Ltd. Sponsored ADR have a Zacks Rank of # 2 (Buy) right now. 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 just one piece of the puzzle for value investors.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether 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.

SWKH currently has a forward P/E ratio of 9.36, while LU has a forward P/E of 17.18. We also note that SWKH has a PEG ratio of 0.94. 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. LU currently has a PEG ratio of 1.27.

Another notable valuation metric for SWKH is its P/B ratio of 0.81. 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, LU has a P/B of 3.28.

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

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

In-Depth Zacks Research for the Tickers Above

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

SWK Holdings Corp. (SWKH) - free report >>

Lufax Holding Ltd. Sponsored ADR (LU) - free report >>

Published in