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SHYF vs. RACE: Which Stock Is the Better Value Option?
Investors looking for stocks in the Automotive - Original Equipment sector might want to consider either The Shyft Group (SHYF - Free Report) or Ferrari (RACE - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Currently, The Shyft Group has a Zacks Rank of #1 (Strong Buy), while Ferrari has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that SHYF likely has seen a stronger improvement to its earnings outlook than RACE has recently. However, value investors will care about much more than just this.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their 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.
SHYF currently has a forward P/E ratio of 15.60, while RACE has a forward P/E of 56.74. We also note that SHYF has a PEG ratio of 1.04. 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. RACE currently has a PEG ratio of 4.87.
Another notable valuation metric for SHYF is its P/B ratio of 3.24. 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, RACE has a P/B of 18.60.
Based on these metrics and many more, SHYF holds a Value grade of B, while RACE has a Value grade of D.
SHYF is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that SHYF is likely the superior value option right now.