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SPXC vs. TRI: Which Stock Should Value Investors Buy Now?

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Investors interested in stocks from the Technology Services sector have probably already heard of SPX (SPXC - Free Report) and Thomson Reuters (TRI - 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 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.

SPX and Thomson Reuters are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This means that SPXC's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle for value investors.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether 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.

SPXC currently has a forward P/E ratio of 21.17, while TRI has a forward P/E of 46.06. We also note that SPXC has a PEG ratio of 1.18. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. TRI currently has a PEG ratio of 4.15.

Another notable valuation metric for SPXC is its P/B ratio of 2.48. 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, TRI has a P/B of 4.13.

These are just a few of the metrics contributing to SPXC's Value grade of B and TRI's Value grade of D.

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


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