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III or ACN: Which Is the Better Value Stock Right Now?

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Investors interested in stocks from the Consulting Services sector have probably already heard of Information Services Group (III - Free Report) and Accenture (ACN - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's 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.

Currently, both Information Services Group and Accenture are holding a Zacks Rank of # 2 (Buy). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. But this is only part of the picture for value investors.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.

Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

III currently has a forward P/E ratio of 17.76, while ACN has a forward P/E of 38.26. We also note that III has a PEG ratio of 0.99. 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. ACN currently has a PEG ratio of 3.83.

Another notable valuation metric for III is its P/B ratio of 3.83. 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, ACN has a P/B of 12.18.

Based on these metrics and many more, III holds a Value grade of A, while ACN has a Value grade of D.

Both III and ACN are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that III is the superior value option right now.


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