Investors looking for stocks in the Consulting Services sector might want to consider either CoreLogic (CLGX - Free Report) or Gartner (IT - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
CoreLogic and Gartner are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that CLGX is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies 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.
CLGX currently has a forward P/E ratio of 17.48, while IT has a forward P/E of 36.65. We also note that CLGX has a PEG ratio of 1.59. 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. IT currently has a PEG ratio of 2.86.
Another notable valuation metric for CLGX is its P/B ratio of 4.32. 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, IT has a P/B of 14.22.
These are just a few of the metrics contributing to CLGX's Value grade of B and IT's Value grade of D.
CLGX stands above IT thanks to its solid earnings outlook, and based on these valuation figures, we also feel that CLGX is the superior value option right now.