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OSK vs. RACE: Which Stock Is the Better Value Option?

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Investors interested in stocks from the Automotive - Original Equipment sector have probably already heard of Oshkosh (OSK - Free Report) and Ferrari (RACE - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Right now, Oshkosh is sporting a Zacks Rank of #2 (Buy), while Ferrari has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that OSK has an improving earnings outlook. However, value investors will care about much more than just this.

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 Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

OSK currently has a forward P/E ratio of 21.21, while RACE has a forward P/E of 42.76. We also note that OSK has a PEG ratio of 1.30. 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. RACE currently has a PEG ratio of 1.98.

Another notable valuation metric for OSK is its P/B ratio of 2.83. 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, RACE has a P/B of 19.16.

Based on these metrics and many more, OSK holds a Value grade of B, while RACE has a Value grade of D.

OSK stands above RACE thanks to its solid earnings outlook, and based on these valuation figures, we also feel that OSK is the superior value option right now.


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Oshkosh Corporation (OSK) - free report >>

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