Back to top

Image: Bigstock

ASGN vs. INOV: Which Stock Should Value Investors Buy Now?

Read MoreHide Full Article

Investors looking for stocks in the Computers - IT Services sector might want to consider either ASGN Inc (ASGN - Free Report) or Inovalon Holdings (INOV - 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.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

ASGN Inc has a Zacks Rank of #2 (Buy), while Inovalon Holdings has a Zacks Rank of #3 (Hold) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that ASGN is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle for value investors.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies 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 23.68, while INOV has a forward P/E of 54.61. We also note that ASGN has a PEG ratio of 1.85. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. INOV currently has a PEG ratio of 2.37.

Another notable valuation metric for ASGN is its P/B ratio of 3.60. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, INOV has a P/B of 8.56.

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

ASGN has seen stronger estimate revision activity and sports more attractive valuation metrics than INOV, so it seems like value investors will conclude that ASGN is the superior option right now.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


ASGN Incorporated (ASGN) - free report >>

Innovator International Developed Power Buffer ETF - November (INOV) - free report >>

Published in