Investors interested in stocks from the Technology Services sector have probably already heard of Ingram Micro (INGM) and Enpro (NPO). 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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Ingram Micro and Enpro are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This means that INGM's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its 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.
INGM currently has a forward P/E ratio of 8.00, while NPO has a forward P/E of 30.41. We also note that INGM has a PEG ratio of 0.89. 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. NPO currently has a PEG ratio of 2.34.
Another notable valuation metric for INGM is its P/B ratio of 1.3. 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, NPO has a P/B of 3.29.
These metrics, and several others, help INGM earn a Value grade of A, while NPO has been given a Value grade of C.
INGM 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 INGM is likely the superior value option right now.
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Ingram Micro Holding Corporation (INGM): Free Stock Analysis Report Enpro Inc. (NPO): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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