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MGA vs. RACE: Which Stock Is the Better Value Option?
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Investors interested in stocks from the Automotive - Original Equipment sector have probably already heard of Magna (MGA - Free Report) and Ferrari (RACE - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Currently, Magna has a Zacks Rank of #2 (Buy), while Ferrari has a Zacks Rank of #3 (Hold). This means that MGA's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its 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.
MGA currently has a forward P/E ratio of 9.15, while RACE has a forward P/E of 37.69. We also note that MGA has a PEG ratio of 1.02. 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. RACE currently has a PEG ratio of 4.25.
Another notable valuation metric for MGA is its P/B ratio of 1.04. 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, RACE has a P/B of 21.82.
These are just a few of the metrics contributing to MGA's Value grade of A and RACE's Value grade of D.
MGA has seen stronger estimate revision activity and sports more attractive valuation metrics than RACE, so it seems like value investors will conclude that MGA is the superior option right now.
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MGA vs. RACE: Which Stock Is the Better Value Option?
Investors interested in stocks from the Automotive - Original Equipment sector have probably already heard of Magna (MGA - Free Report) and Ferrari (RACE - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Currently, Magna has a Zacks Rank of #2 (Buy), while Ferrari has a Zacks Rank of #3 (Hold). This means that MGA's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its 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.
MGA currently has a forward P/E ratio of 9.15, while RACE has a forward P/E of 37.69. We also note that MGA has a PEG ratio of 1.02. 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. RACE currently has a PEG ratio of 4.25.
Another notable valuation metric for MGA is its P/B ratio of 1.04. 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, RACE has a P/B of 21.82.
These are just a few of the metrics contributing to MGA's Value grade of A and RACE's Value grade of D.
MGA has seen stronger estimate revision activity and sports more attractive valuation metrics than RACE, so it seems like value investors will conclude that MGA is the superior option right now.