Back to top

ASHTY vs. BOOM: Which Stock Should Value Investors Buy Now?

Read MoreHide Full Article

Investors looking for stocks in the Industrial Services sector might want to consider either Ashtead Group PLC (ASHTY - Free Report) or DMC Global (BOOM - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Ashtead Group PLC has a Zacks Rank of #2 (Buy), while DMC Global has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that ASHTY likely has seen a stronger improvement to its earnings outlook than BOOM has recently. 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.

The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

ASHTY currently has a forward P/E ratio of 11.25, while BOOM has a forward P/E of 18.95. We also note that ASHTY has a PEG ratio of 0.51. 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. BOOM currently has a PEG ratio of 0.95.

Another notable valuation metric for ASHTY is its P/B ratio of 3.52. 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, BOOM has a P/B of 5.04.

These metrics, and several others, help ASHTY earn a Value grade of A, while BOOM has been given a Value grade of C.

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

In-Depth Zacks Research for the Tickers Above

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

Ashtead Group PLC (ASHTY) - free report >>

DMC Global Inc. (BOOM) - free report >>

More from Zacks Tale of the Tape

You May Like

Published in