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HOLX or ABMD: Which Is the Better Value Stock Right Now?

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Investors with an interest in Medical - Instruments stocks have likely encountered both Hologic (HOLX - Free Report) and Abiomed . 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.

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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Currently, Hologic has a Zacks Rank of #2 (Buy), while Abiomed 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 HOLX is likely seeing its earnings outlook improve to a greater extent. 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 highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

HOLX currently has a forward P/E ratio of 22.23, while ABMD has a forward P/E of 73.33. We also note that HOLX has a PEG ratio of 3.16. 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. ABMD currently has a PEG ratio of 3.76.

Another notable valuation metric for HOLX is its P/B ratio of 6.23. 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, ABMD has a P/B of 9.96.

These are just a few of the metrics contributing to HOLX's Value grade of B and ABMD's Value grade of D.

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


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