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CORE or SPSC: Which Is the Better Value Stock Right Now?

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Investors interested in Business - Services stocks are likely familiar with Core-Mark and SPS Commerce (SPSC - 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.

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.

Core-Mark and SPS Commerce are both sporting a Zacks Rank of # 2 (Buy) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. But this is only part of the picture for value investors.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether 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.

CORE currently has a forward P/E ratio of 18.98, while SPSC has a forward P/E of 40.16. We also note that CORE has a PEG ratio of 2.37. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. SPSC currently has a PEG ratio of 2.68.

Another notable valuation metric for CORE is its P/B ratio of 2.41. 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, SPSC has a P/B of 4.81.

Based on these metrics and many more, CORE holds a Value grade of B, while SPSC has a Value grade of D.

Both CORE and SPSC are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that CORE is the superior value option right now.


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