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HOLX vs. SMLR: Which Stock Should Value Investors Buy Now?

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Investors interested in Medical - Instruments stocks are likely familiar with Hologic (HOLX - Free Report) and Semler Scientific Inc. . But which of these two companies is the best option for those looking for undervalued stocks? Let's 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 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.

Currently, both Hologic and Semler Scientific Inc. are holding a Zacks Rank of # 2 (Buy). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. However, value investors will care about much more than just this.

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 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.

HOLX currently has a forward P/E ratio of 8.13, while SMLR has a forward P/E of 43.98. We also note that HOLX has a PEG ratio of 0.53. 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. SMLR currently has a PEG ratio of 1.76.

Another notable valuation metric for HOLX is its P/B ratio of 5.65. 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, SMLR has a P/B of 23.84.

These are just a few of the metrics contributing to HOLX's Value grade of B and SMLR's Value grade of D.

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


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