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LL vs. LOW: Which Stock Should Value Investors Buy Now?
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Investors interested in Building Products - Retail stocks are likely familiar with Lumber Liquidators Holdings (LL - Free Report) and Lowe's (LOW - 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.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. 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 Lumber Liquidators Holdings and Lowe's 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. But this is just one factor that value investors are interested in.
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 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.
LL currently has a forward P/E ratio of 15.99, while LOW has a forward P/E of 18.19. We also note that LL has a PEG ratio of 0.71. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. LOW currently has a PEG ratio of 1.39.
Another notable valuation metric for LL is its P/B ratio of 2.64. 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, LOW has a P/B of 310.19.
These metrics, and several others, help LL earn a Value grade of A, while LOW has been given a Value grade of C.
Both LL and LOW are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that LL is the superior value option right now.
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LL vs. LOW: Which Stock Should Value Investors Buy Now?
Investors interested in Building Products - Retail stocks are likely familiar with Lumber Liquidators Holdings (LL - Free Report) and Lowe's (LOW - 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.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. 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 Lumber Liquidators Holdings and Lowe's 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. But this is just one factor that value investors are interested in.
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 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.
LL currently has a forward P/E ratio of 15.99, while LOW has a forward P/E of 18.19. We also note that LL has a PEG ratio of 0.71. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. LOW currently has a PEG ratio of 1.39.
Another notable valuation metric for LL is its P/B ratio of 2.64. 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, LOW has a P/B of 310.19.
These metrics, and several others, help LL earn a Value grade of A, while LOW has been given a Value grade of C.
Both LL and LOW are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that LL is the superior value option right now.