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IKTSY vs. FDS: Which Stock Should Value Investors Buy Now?

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Investors interested in stocks from the Business - Information Services sector have probably already heard of INTERTEK GP (IKTSY - Free Report) and FactSet Research (FDS - 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.

INTERTEK GP and FactSet Research are both sporting 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. However, value investors will care about much more than just this.

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.

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.

IKTSY currently has a forward P/E ratio of 22.11, while FDS has a forward P/E of 33.01. We also note that IKTSY has a PEG ratio of 1.75. 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. FDS currently has a PEG ratio of 3.30.

Another notable valuation metric for IKTSY is its P/B ratio of 6.83. 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, FDS has a P/B of 13.37.

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

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


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