Investors with an interest in Business - Services stocks have likely encountered both 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.
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 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.
Right now, Core-Mark is sporting a Zacks Rank of #2 (Buy), while PRGX Global has a Zacks Rank of #5 (Strong Sell). Investors should feel comfortable knowing that CORE likely has seen a stronger improvement to its earnings outlook than PRGX has recently. But this is just one factor that value investors are interested in.
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.
CORE currently has a forward P/E ratio of 27.12, while PRGX has a forward P/E of 99.44. We also note that CORE has a PEG ratio of 2.09. 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. PRGX currently has a PEG ratio of 7.96.
Another notable valuation metric for CORE is its P/B ratio of 2.85. 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 3.59.
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.