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AXS or BRK.B: Which Is the Better Value Stock Right Now?

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Investors interested in Insurance - Property and Casualty stocks are likely familiar with Axis Capital (AXS - Free Report) and Berkshire Hathaway B (BRK.B - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. 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, both Axis Capital and Berkshire Hathaway B are sporting a Zacks Rank of # 2 (Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. But this is just one piece of the puzzle for value investors.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their 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.

AXS currently has a forward P/E ratio of 6.35, while BRK.B has a forward P/E of 22.12. We also note that AXS has a PEG ratio of 1.27. 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. BRK.B currently has a PEG ratio of 3.16.

Another notable valuation metric for AXS is its P/B ratio of 1.17. 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, BRK.B has a P/B of 1.56.

These metrics, and several others, help AXS earn a Value grade of A, while BRK.B has been given a Value grade of C.

Both AXS and BRK.B are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that AXS is the superior value option right now.


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Berkshire Hathaway Inc. (BRK.B) - free report >>

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