Investors interested in Furniture stocks are likely familiar with American Woodmark (AMWD - Free Report) and WillScot (WSC - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's 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.
Right now, both American Woodmark and WillScot are sporting a Zacks Rank of # 2 (Buy). 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 just one factor that value investors are interested in.
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.
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.
AMWD currently has a forward P/E ratio of 13.05, while WSC has a forward P/E of 1,265.60. We also note that AMWD has a PEG ratio of 1.45. 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. WSC currently has a PEG ratio of 84.37.
Another notable valuation metric for AMWD is its P/B ratio of 2.49. 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, WSC has a P/B of 2.70.
These are just a few of the metrics contributing to AMWD's Value grade of B and WSC's Value grade of D.
Both AMWD and WSC are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that AMWD is the superior value option right now.