Back to top

Image: Bigstock

VRTX or TECH: Which Is the Better Value Stock Right Now?

Read MoreHide Full Article

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 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Vertex Pharmaceuticals and Techne are sporting Zacks Ranks of #2 (Buy) and #4 (Sell), respectively, right now. 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. But this is just one factor that value investors are interested in.

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 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.

VRTX currently has a forward P/E ratio of 20.91, while TECH has a forward P/E of 41.73. We also note that VRTX 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. TECH currently has a PEG ratio of 2.61.

Another notable valuation metric for VRTX is its P/B ratio of 6.02. 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 7.81.

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

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.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Vertex Pharmaceuticals Incorporated (VRTX) - free report >>

Bio-Techne Corp (TECH) - free report >>

Published in