Investors with an interest in Medical - Products stocks have likely encountered both Phibro Animal Health (PAHC) and LeMaitre Vascular (LMAT). 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Right now, Phibro Animal Health is sporting a Zacks Rank of #2 (Buy), while LeMaitre Vascular has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that PAHC has an improving earnings outlook. But this is only part of the picture for value investors.
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 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.
PAHC currently has a forward P/E ratio of 11.38, while LMAT has a forward P/E of 37.42. We also note that PAHC has a PEG ratio of 0.44. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. LMAT currently has a PEG ratio of 2.14.
Another notable valuation metric for PAHC is its P/B ratio of 3.98. 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, LMAT has a P/B of 5.27.
These metrics, and several others, help PAHC earn a Value grade of A, while LMAT has been given a Value grade of D.
PAHC has seen stronger estimate revision activity and sports more attractive valuation metrics than LMAT, so it seems like value investors will conclude that PAHC is the superior option right now.
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Phibro Animal Health Corporation (PAHC): Free Stock Analysis Report LeMaitre Vascular, Inc. (LMAT): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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