Back to top

Image: Bigstock

CNXC vs. SGSOY: Which Stock Is the Better Value Option?

Read MoreHide Full Article

Investors looking for stocks in the Business - Services sector might want to consider either Concentrix Corporation (CNXC - Free Report) or SGS SA (SGSOY - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Concentrix Corporation and SGS SA are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that CNXC is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle for value investors.

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.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

CNXC currently has a forward P/E ratio of 7.26, while SGSOY has a forward P/E of 20.43. We also note that CNXC has a PEG ratio of 0.95. 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. SGSOY currently has a PEG ratio of 3.43.

Another notable valuation metric for CNXC is its P/B ratio of 1.42. 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, SGSOY has a P/B of 20.11.

These are just a few of the metrics contributing to CNXC's Value grade of A and SGSOY's Value grade of C.

CNXC sticks out from SGSOY in both our Zacks Rank and Style Scores models, so value investors will likely feel that CNXC is the better option right now.


See More Zacks Research for These Tickers


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


SGS SA (SGSOY) - free report >>

Concentrix Corporation (CNXC) - free report >>

Published in