Investors interested in stocks from the Business - Services sector have probably already heard of Core-Mark (CORE - Free Report) and PRGX Global (PRGX - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, Core-Mark has a Zacks Rank of #2 (Buy), while PRGX Global has a Zacks Rank of #5 (Strong Sell). This means that CORE's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. 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 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.
CORE currently has a forward P/E ratio of 27.28, while PRGX has a forward P/E of 225. We also note that CORE has a PEG ratio of 2.10. 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. PRGX currently has a PEG ratio of 18.
Another notable valuation metric for CORE is its P/B ratio of 2.79. 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, PRGX has a P/B of 3.61.
These are just a few of the metrics contributing to CORE's Value grade of B and PRGX's Value grade of D.
CORE sticks out from PRGX in both our Zacks Rank and Style Scores models, so value investors will likely feel that CORE is the better option right now.