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ASGN vs. INOV: Which Stock Is the Better Value Option?

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Investors with an interest in Computers - IT Services stocks have likely encountered both ASGN Inc (ASGN - Free Report) and Inovalon Holdings . 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.

ASGN Inc and Inovalon Holdings are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that ASGN has an improving earnings outlook. But this is only part of the picture for value investors.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their 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.

ASGN currently has a forward P/E ratio of 22.54, while INOV has a forward P/E of 53.87. We also note that ASGN has a PEG ratio of 1.84. 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. INOV currently has a PEG ratio of 2.34.

Another notable valuation metric for ASGN is its P/B ratio of 3.59. 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, INOV has a P/B of 8.44.

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

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


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