Investors interested in Medical - Biomedical and Genetics stocks are likely familiar with Anika Therapeutics (ANIK - Free Report) and Alkermes (ALKS - 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.
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 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.
Anika Therapeutics has a Zacks Rank of #2 (Buy), while Alkermes has a Zacks Rank of #3 (Hold) right now. This means that ANIK's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture for value investors.
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.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
ANIK currently has a forward P/E ratio of 43.82, while ALKS has a forward P/E of 606.17. We also note that ANIK has a PEG ratio of 4.38. 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. ALKS currently has a PEG ratio of 40.41.
Another notable valuation metric for ANIK is its P/B ratio of 2.46. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, ALKS has a P/B of 6.04.
These are just a few of the metrics contributing to ANIK's Value grade of B and ALKS's Value grade of D.
ANIK stands above ALKS thanks to its solid earnings outlook, and based on these valuation figures, we also feel that ANIK is the superior value option right now.