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AMN vs. AMEH: Which Stock Should Value Investors Buy Now?

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Investors with an interest in Medical Services stocks have likely encountered both AMN Healthcare Services (AMN - Free Report) and Apollo Medical Holdings, Inc. . But which of these two stocks presents investors with the better value opportunity right now? Let's 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Currently, AMN Healthcare Services has a Zacks Rank of #2 (Buy), while Apollo Medical Holdings, Inc. has a Zacks Rank of #3 (Hold). This means that AMN's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst 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 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.

AMN currently has a forward P/E ratio of 20.35, while AMEH has a forward P/E of 70.93. We also note that AMN has a PEG ratio of 1.94. 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. AMEH currently has a PEG ratio of 3.55.

Another notable valuation metric for AMN is its P/B ratio of 5.77. 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, AMEH has a P/B of 12.42.

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

AMN is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that AMN is likely the superior value option right now.


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