Investors with an interest in Manufacturing - Tools & Related Products stocks have likely encountered both AB SKF (SKFRY) and Core & Main (CNM). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Right now, AB SKF is sporting a Zacks Rank of #2 (Buy), while Core & Main has a Zacks Rank of #5 (Strong 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 factor that value investors are interested in.
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.
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.
SKFRY currently has a forward P/E ratio of 18.06, while CNM has a forward P/E of 23.08. We also note that SKFRY has a PEG ratio of 1.62. 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 2.03.
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 5.21.
These are just a few of the metrics contributing to SKFRY's Value grade of B and CNM's Value grade of D.
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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