Investors with an interest in Leisure and Recreation Products stocks have likely encountered both MCBC Holdings (MCFT - Free Report) and Pool Corp. (POOL - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Right now, MCBC Holdings is sporting a Zacks Rank of #1 (Strong Buy), while Pool Corp. has a Zacks Rank of #2 (Buy). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that MCFT is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture for value investors.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its 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.
MCFT currently has a forward P/E ratio of 11.23, while POOL has a forward P/E of 25.87. We also note that MCFT has a PEG ratio of 0.75. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. POOL currently has a PEG ratio of 1.10.
Another notable valuation metric for MCFT is its P/B ratio of 10.56. 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, POOL has a P/B of 15.74.
These are just a few of the metrics contributing to MCFT's Value grade of B and POOL's Value grade of C.
MCFT sticks out from POOL in both our Zacks Rank and Style Scores models, so value investors will likely feel that MCFT is the better option right now.