Investors interested in Leisure and Recreation Products stocks are likely familiar with MasterCraft Boat Holdings, Inc. (MCFT - Free Report) and Pool Corp. (POOL - 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.
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 Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Right now, MasterCraft Boat Holdings, Inc. is sporting a Zacks Rank of #2 (Buy), while Pool Corp. has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that MCFT has an improving earnings outlook. But this is just one factor that value investors are interested in.
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.
MCFT currently has a forward P/E ratio of 9.08, while POOL has a forward P/E of 28.91. We also note that MCFT has a PEG ratio of 0.61. 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. POOL currently has a PEG ratio of 1.23.
Another notable valuation metric for MCFT is its P/B ratio of 5.69. 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, POOL has a P/B of 31.92.
Based on these metrics and many more, MCFT holds a Value grade of A, while POOL has a Value grade of D.
MCFT sticks out from POOL in both our Zacks Rank and Style Scores models, so value investors will likely feel that MCFT is the better option right now.