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VRTX vs. TECH: Which Stock Should Value Investors Buy Now?

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Investors with an interest in Medical - Biomedical and Genetics stocks have likely encountered both Vertex Pharmaceuticals (VRTX - Free Report) and Techne (TECH - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. 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, Vertex Pharmaceuticals has a Zacks Rank of #2 (Buy), while Techne has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that VRTX is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.

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.

VRTX currently has a forward P/E ratio of 16.14, while TECH has a forward P/E of 53.22. We also note that VRTX has a PEG ratio of 1.04. 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. TECH currently has a PEG ratio of 2.05.

Another notable valuation metric for VRTX is its P/B ratio of 5.82. 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, TECH has a P/B of 9.55.

These are just a few of the metrics contributing to VRTX's Value grade of B and TECH's Value grade of C.

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


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Vertex Pharmaceuticals Incorporated (VRTX) - free report >>

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