Investors interested in stocks from the Computer - Services sector have probably already heard of LogMein and ManTech International (MANT). 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 Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
LogMein and ManTech International are both sporting a Zacks Rank of # 2 (Buy) right now. Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. 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.
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.
LOGM currently has a forward P/E ratio of 16.83, while MANT has a forward P/E of 33.51. We also note that LOGM has a PEG ratio of 3.37. 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. MANT currently has a PEG ratio of 4.19.
Another notable valuation metric for LOGM is its P/B ratio of 1.55. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, MANT has a P/B of 2.24.
Based on these metrics and many more, LOGM holds a Value grade of B, while MANT has a Value grade of C.
Both LOGM and MANT are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that LOGM is the superior value option right now.