We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
AXL vs. HZN: Which Stock Is the Better Value Option?
Read MoreHide Full Article
Investors interested in Automotive - Original Equipment stocks are likely familiar with American Axle & Manufacturing (AXL - Free Report) and Horizon Global . 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.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Right now, American Axle & Manufacturing is sporting a Zacks Rank of #2 (Buy), while Horizon Global has a Zacks Rank of #4 (Sell). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that AXL is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.
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.
AXL currently has a forward P/E ratio of 4.18, while HZN has a forward P/E of 49.14. We also note that AXL has a PEG ratio of 0.52. 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. HZN currently has a PEG ratio of 14.33.
Another notable valuation metric for AXL is its P/B ratio of 1.06. 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, HZN has a P/B of 1.71.
These metrics, and several others, help AXL earn a Value grade of A, while HZN has been given a Value grade of D.
AXL has seen stronger estimate revision activity and sports more attractive valuation metrics than HZN, so it seems like value investors will conclude that AXL is the superior option right now.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
AXL vs. HZN: Which Stock Is the Better Value Option?
Investors interested in Automotive - Original Equipment stocks are likely familiar with American Axle & Manufacturing (AXL - Free Report) and Horizon Global . 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.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Right now, American Axle & Manufacturing is sporting a Zacks Rank of #2 (Buy), while Horizon Global has a Zacks Rank of #4 (Sell). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that AXL is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.
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.
AXL currently has a forward P/E ratio of 4.18, while HZN has a forward P/E of 49.14. We also note that AXL has a PEG ratio of 0.52. 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. HZN currently has a PEG ratio of 14.33.
Another notable valuation metric for AXL is its P/B ratio of 1.06. 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, HZN has a P/B of 1.71.
These metrics, and several others, help AXL earn a Value grade of A, while HZN has been given a Value grade of D.
AXL has seen stronger estimate revision activity and sports more attractive valuation metrics than HZN, so it seems like value investors will conclude that AXL is the superior option right now.