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LOGM vs. GIB: Which Stock Should Value Investors Buy Now?

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Investors with an interest in Computer - Services stocks have likely encountered both LogMein and CGI Group (GIB - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

LogMein has a Zacks Rank of #2 (Buy), while CGI Group has a Zacks Rank of #3 (Hold) right now. This means that LOGM's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies 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.

LOGM currently has a forward P/E ratio of 14.30, while GIB has a forward P/E of 16.55. We also note that LOGM has a PEG ratio of 0.82. 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. GIB currently has a PEG ratio of 1.84.

Another notable valuation metric for LOGM is its P/B ratio of 1.30. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, GIB has a P/B of 3.15.

These are just a few of the metrics contributing to LOGM's Value grade of B and GIB's Value grade of C.

LOGM is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that LOGM is likely the superior value option right now.


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