Investors looking for stocks in the Medical Info Systems sector might want to consider either Syneos Health (SYNH) or HMS Holdings . 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.
Right now, Syneos Health is sporting a Zacks Rank of #2 (Buy), while HMS Holdings has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that SYNH is likely seeing its earnings outlook improve to a greater extent. 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.
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.
SYNH currently has a forward P/E ratio of 17.11, while HMSY has a forward P/E of 22.51. We also note that SYNH has a PEG ratio of 1.63. 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. HMSY currently has a PEG ratio of 2.05.
Another notable valuation metric for SYNH is its P/B ratio of 1.99. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, HMSY has a P/B of 3.19.
These metrics, and several others, help SYNH earn a Value grade of B, while HMSY has been given a Value grade of C.
SYNH sticks out from HMSY in both our Zacks Rank and Style Scores models, so value investors will likely feel that SYNH is the better option right now.