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ITOCY vs. TSCO: Which Stock Should Value Investors Buy Now?

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Investors looking for stocks in the Retail - Miscellaneous sector might want to consider either Itochu Corp. (ITOCY - Free Report) or Tractor Supply (TSCO - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Both Itochu Corp. and Tractor Supply have a Zacks Rank of # 2 (Buy) right now. Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. But this is only part of the picture 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.

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.

ITOCY currently has a forward P/E ratio of 7.02, while TSCO has a forward P/E of 28.03. We also note that ITOCY has a PEG ratio of 0.47. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. TSCO currently has a PEG ratio of 2.75.

Another notable valuation metric for ITOCY is its P/B ratio of 1.27. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, TSCO has a P/B of 13.44.

These are just a few of the metrics contributing to ITOCY's Value grade of A and TSCO's Value grade of C.

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


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