Investors interested in Computer - Peripheral Equipment stocks are likely familiar with Immersion (IMMR - Free Report) and Logitech (LOGI - 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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Currently, both Immersion and Logitech are holding a Zacks Rank of # 1 (Strong Buy). This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. But this is only part of the picture 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.
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.
IMMR currently has a forward P/E ratio of 8.27, while LOGI has a forward P/E of 25.13. We also note that IMMR has a PEG ratio of 0.55. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. LOGI currently has a PEG ratio of 3.14.
Another notable valuation metric for IMMR is its P/B ratio of 4.84. 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, LOGI has a P/B of 7.03.
These metrics, and several others, help IMMR earn a Value grade of B, while LOGI has been given a Value grade of F.
Both IMMR and LOGI are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that IMMR is the superior value option right now.