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ASGN vs. FICO: Which Stock Should Value Investors Buy Now?

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Investors interested in stocks from the Computers - IT Services sector have probably already heard of ASGN Inc (ASGN - Free Report) and Fair Isaac (FICO - 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, ASGN Inc is sporting a Zacks Rank of #2 (Buy), while Fair Isaac has a Zacks Rank of #4 (Sell). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that ASGN is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.

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 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.

ASGN currently has a forward P/E ratio of 12.85, while FICO has a forward P/E of 27.23. We also note that ASGN has a PEG ratio of 1.09. 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. FICO currently has a PEG ratio of 2.72.

Another notable valuation metric for ASGN is its P/B ratio of 2.62. 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, FICO has a P/B of 20.61.

Based on these metrics and many more, ASGN holds a Value grade of B, while FICO has a Value grade of F.

ASGN has seen stronger estimate revision activity and sports more attractive valuation metrics than FICO, so it seems like value investors will conclude that ASGN is the superior option right now.


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