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CBM or ILMN: Which Is the Better Value Stock Right Now?

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Investors with an interest in Medical - Biomedical and Genetics stocks have likely encountered both Cambrex and Illumina (ILMN - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

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, Cambrex is sporting a Zacks Rank of #2 (Buy), while Illumina has a Zacks Rank of #3 (Hold). This means that CBM's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.

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.

CBM currently has a forward P/E ratio of 15.25, while ILMN has a forward P/E of 41.84. We also note that CBM has a PEG ratio of 1.53. 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. ILMN currently has a PEG ratio of 2.01.

Another notable valuation metric for CBM is its P/B ratio of 2.25. 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, ILMN has a P/B of 11.15.

Based on these metrics and many more, CBM holds a Value grade of A, while ILMN has a Value grade of D.

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


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