Investors interested in Medical - Instruments stocks are likely familiar with Integer (ITGR) and Penumbra (PEN). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Currently, Integer has a Zacks Rank of #2 (Buy), while Penumbra has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that ITGR likely has seen a stronger improvement to its earnings outlook than PEN has recently. But this is just one piece of the puzzle 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 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.
ITGR currently has a forward P/E ratio of 15.84, while PEN has a forward P/E of 70.85. We also note that ITGR has a PEG ratio of 0.80. 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. PEN currently has a PEG ratio of 2.35.
Another notable valuation metric for ITGR is its P/B ratio of 2.08. 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, PEN has a P/B of 7.85.
These are just a few of the metrics contributing to ITGR's Value grade of B and PEN's Value grade of D.
ITGR sticks out from PEN in both our Zacks Rank and Style Scores models, so value investors will likely feel that ITGR is the better option right now.
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Integer Holdings Corporation (ITGR): Free Stock Analysis Report Penumbra, Inc. (PEN): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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