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FERGY vs. IEX: Which Stock Is the Better Value Option?

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Investors interested in stocks from the Manufacturing - General Industrial sector have probably already heard of Wolseley PLC and Idex (IEX - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Wolseley PLC has a Zacks Rank of #2 (Buy), while Idex has a Zacks Rank of #4 (Sell) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that FERGY has an improving earnings outlook. But this is only part of the picture for value investors.

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.

FERGY currently has a forward P/E ratio of 13.02, while IEX has a forward P/E of 21.46. We also note that FERGY has a PEG ratio of 2.03. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. IEX currently has a PEG ratio of 2.15.

Another notable valuation metric for FERGY is its P/B ratio of 3.67. 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, IEX has a P/B of 4.14.

These are just a few of the metrics contributing to FERGY's Value grade of B and IEX's Value grade of F.

FERGY sticks out from IEX in both our Zacks Rank and Style Scores models, so value investors will likely feel that FERGY is the better option right now.


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