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ATGE vs. BFAM: Which Stock Should Value Investors Buy Now?

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Investors interested in Schools stocks are likely familiar with Adtalem Global Education (ATGE - Free Report) and Bright Horizons Family Solutions (BFAM - 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 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.

Right now, Adtalem Global Education is sporting a Zacks Rank of #1 (Strong Buy), while Bright Horizons Family Solutions has a Zacks Rank of #4 (Sell). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that ATGE is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.

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.

ATGE currently has a forward P/E ratio of 8.17, while BFAM has a forward P/E of 71.44. We also note that ATGE has a PEG ratio of 0.54. 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. BFAM currently has a PEG ratio of 2.97.

Another notable valuation metric for ATGE is its P/B ratio of 1.35. 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, BFAM has a P/B of 7.47.

These are just a few of the metrics contributing to ATGE's Value grade of B and BFAM's Value grade of D.

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


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Bright Horizons Family Solutions Inc. (BFAM) - free report >>

Adtalem Global Education Inc. (ATGE) - free report >>

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