Investors interested in Manufacturing - Tools & Related Products stocks are likely familiar with AB SKF (SKFRY) and Core & Main (CNM). 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.
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, AB SKF is sporting a Zacks Rank of #1 (Strong Buy), while Core & Main has a Zacks Rank of #4 (Sell). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that SKFRY has an improving earnings outlook. But this is just one piece of the puzzle for value investors.
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.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
SKFRY currently has a forward P/E ratio of 17.93, while CNM has a forward P/E of 23.55. We also note that SKFRY has a PEG ratio of 1.61. 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. CNM currently has a PEG ratio of 2.07.
Another notable valuation metric for SKFRY is its P/B ratio of 1.97. 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, CNM has a P/B of 5.32.
These metrics, and several others, help SKFRY earn a Value grade of B, while CNM has been given a Value grade of C.
SKFRY sticks out from CNM in both our Zacks Rank and Style Scores models, so value investors will likely feel that SKFRY is the better option right now.
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AB SKF (SKFRY): Free Stock Analysis Report Core & Main, Inc. (CNM): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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