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CFX vs. NDSN: Which Stock Should Value Investors Buy Now?

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Investors interested in stocks from the Manufacturing - General Industrial sector have probably already heard of Colfax (CFX - Free Report) and Nordson (NDSN - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.

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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Colfax has a Zacks Rank of #2 (Buy), while Nordson has a Zacks Rank of #4 (Sell) right now. Investors should feel comfortable knowing that CFX likely has seen a stronger improvement to its earnings outlook than NDSN has recently. 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.

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.

CFX currently has a forward P/E ratio of 21.59, while NDSN has a forward P/E of 29.77. We also note that CFX has a PEG ratio of 1.02. 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. NDSN currently has a PEG ratio of 2.29.

Another notable valuation metric for CFX is its P/B ratio of 1.52. 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, NDSN has a P/B of 6.70.

Based on these metrics and many more, CFX holds a Value grade of B, while NDSN has a Value grade of C.

CFX sticks out from NDSN in both our Zacks Rank and Style Scores models, so value investors will likely feel that CFX is the better option right now.


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