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SWKH or MCO: Which Is the Better Value Stock Right Now?
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Investors interested in stocks from the Financial - Miscellaneous Services sector have probably already heard of SWK Holdings Corp. (SWKH - Free Report) and Moody's (MCO - Free Report) . 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 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, SWK Holdings Corp. is sporting a Zacks Rank of #2 (Buy), while Moody's has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that SWKH likely has seen a stronger improvement to its earnings outlook than MCO has recently. But this is just one piece of the puzzle for value investors.
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.
SWKH currently has a forward P/E ratio of 7.98, while MCO has a forward P/E of 31.33. We also note that SWKH has a PEG ratio of 0.80. 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. MCO currently has a PEG ratio of 2.85.
Another notable valuation metric for SWKH is its P/B ratio of 0.94. 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, MCO has a P/B of 29.26.
Based on these metrics and many more, SWKH holds a Value grade of B, while MCO has a Value grade of D.
SWKH has seen stronger estimate revision activity and sports more attractive valuation metrics than MCO, so it seems like value investors will conclude that SWKH is the superior option right now.
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SWKH or MCO: Which Is the Better Value Stock Right Now?
Investors interested in stocks from the Financial - Miscellaneous Services sector have probably already heard of SWK Holdings Corp. (SWKH - Free Report) and Moody's (MCO - Free Report) . 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 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, SWK Holdings Corp. is sporting a Zacks Rank of #2 (Buy), while Moody's has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that SWKH likely has seen a stronger improvement to its earnings outlook than MCO has recently. But this is just one piece of the puzzle for value investors.
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.
SWKH currently has a forward P/E ratio of 7.98, while MCO has a forward P/E of 31.33. We also note that SWKH has a PEG ratio of 0.80. 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. MCO currently has a PEG ratio of 2.85.
Another notable valuation metric for SWKH is its P/B ratio of 0.94. 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, MCO has a P/B of 29.26.
Based on these metrics and many more, SWKH holds a Value grade of B, while MCO has a Value grade of D.
SWKH has seen stronger estimate revision activity and sports more attractive valuation metrics than MCO, so it seems like value investors will conclude that SWKH is the superior option right now.