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GFN or WNS: Which Is the Better Value Stock Right Now?

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Investors with an interest in Business - Services stocks have likely encountered both General Finance and WNS (Holdings) Limited (WNS - 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.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. 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, General Finance has a Zacks Rank of #2 (Buy), while WNS (Holdings) Limited has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that GFN likely has seen a stronger improvement to its earnings outlook than WNS has recently. But this is only part of the picture for value investors.

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.

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.

GFN currently has a forward P/E ratio of 15.94, while WNS has a forward P/E of 21.69. We also note that GFN has a PEG ratio of 1.33. 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. WNS currently has a PEG ratio of 1.76.

Another notable valuation metric for GFN is its P/B ratio of 2.36. 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, WNS has a P/B of 6.05.

These metrics, and several others, help GFN earn a Value grade of B, while WNS has been given a Value grade of C.

GFN has seen stronger estimate revision activity and sports more attractive valuation metrics than WNS, so it seems like value investors will conclude that GFN is the superior option right now.


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