Back to top

Image: Bigstock

IHICY vs. GTLS: Which Stock Should Value Investors Buy Now?

Read MoreHide Full Article

Investors looking for stocks in the Manufacturing - General Industrial sector might want to consider either IHI CORP (IHICY - Free Report) or Chart Industries (GTLS - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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.

Currently, IHI CORP has a Zacks Rank of #2 (Buy), while Chart Industries has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that IHICY is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture for value investors.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when 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.

IHICY currently has a forward P/E ratio of 0.63, while GTLS has a forward P/E of 26.89. We also note that IHICY has a PEG ratio of 0.06. 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. GTLS currently has a PEG ratio of 0.93.

Another notable valuation metric for IHICY is its P/B ratio of 1.47. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, GTLS has a P/B of 2.74.

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

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


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Chart Industries, Inc. (GTLS) - free report >>

IHI CORP (IHICY) - free report >>

Published in