Investors interested in Medical Services stocks are likely familiar with AMN Healthcare Services (AMN - Free Report) and Icon PLC (ICLR - 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.
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.
Right now, AMN Healthcare Services is sporting a Zacks Rank of #2 (Buy), while Icon PLC has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that AMN likely has seen a stronger improvement to its earnings outlook than ICLR has recently. But this is only part of the picture 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.
AMN currently has a forward P/E ratio of 17.96, while ICLR has a forward P/E of 22.42. We also note that AMN has a PEG ratio of 1.38. 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. ICLR currently has a PEG ratio of 1.95.
Another notable valuation metric for AMN is its P/B ratio of 4.53. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, ICLR has a P/B of 5.52.
These metrics, and several others, help AMN earn a Value grade of B, while ICLR has been given a Value grade of C.
AMN sticks out from ICLR in both our Zacks Rank and Style Scores models, so value investors will likely feel that AMN is the better option right now.