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SIG vs. CFRUY: Which Stock Should Value Investors Buy Now?

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Investors looking for stocks in the Retail - Jewelry sector might want to consider either Signet (SIG - Free Report) or Compagnie Financiere Richemont AG (CFRUY - 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.

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 Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Signet and Compagnie Financiere Richemont AG are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that SIG likely has seen a stronger improvement to its earnings outlook than CFRUY has recently. But this is just one piece of the puzzle 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.

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.

SIG currently has a forward P/E ratio of 4.95, while CFRUY has a forward P/E of 18.73. We also note that SIG has a PEG ratio of 0.62. 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. CFRUY currently has a PEG ratio of 1.09.

Another notable valuation metric for SIG is its P/B ratio of 2.45. 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, CFRUY has a P/B of 5.64.

These metrics, and several others, help SIG earn a Value grade of A, while CFRUY has been given a Value grade of D.

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


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