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APELY vs. MRCY: Which Stock Is the Better Value Option?

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Investors looking for stocks in the Computer - Peripheral Equipment sector might want to consider either Alps Electric (APELY - Free Report) or Mercury Systems (MRCY - 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.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. 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.

Right now, Alps Electric is sporting a Zacks Rank of #2 (Buy), while Mercury Systems has a Zacks Rank of #5 (Strong Sell). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that APELY 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 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.

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.

APELY currently has a forward P/E ratio of 10.59, while MRCY has a forward P/E of 28.61. We also note that APELY has a PEG ratio of 2.94. 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. MRCY currently has a PEG ratio of 16.73.

Another notable valuation metric for APELY is its P/B ratio of 0.53. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, MRCY has a P/B of 1.41.

These are just a few of the metrics contributing to APELY's Value grade of B and MRCY's Value grade of F.

APELY is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that APELY is likely the superior value option right now.


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