Investors with an interest in Medical - Biomedical and Genetics stocks have likely encountered both Alexion Pharmaceuticals (ALXN - Free Report) and Cambrex (CBM - 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.
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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, Alexion Pharmaceuticals has a Zacks Rank of #2 (Buy), while Cambrex has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that ALXN likely has seen a stronger improvement to its earnings outlook than CBM has recently. But this is just one piece of the puzzle for value investors.
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 highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
ALXN currently has a forward P/E ratio of 11.32, while CBM has a forward P/E of 29.44. We also note that ALXN has a PEG ratio of 0.97. 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. CBM currently has a PEG ratio of 2.94.
Another notable valuation metric for ALXN is its P/B ratio of 2.47. 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, CBM has a P/B of 2.99.
These are just a few of the metrics contributing to ALXN's Value grade of B and CBM's Value grade of C.
ALXN sticks out from CBM in both our Zacks Rank and Style Scores models, so value investors will likely feel that ALXN is the better option right now.