Investors looking for stocks in the Financial - Miscellaneous Services sector might want to consider either BB Seguridade Participacoes SA (BBSEY) or Circle Internet Group, Inc. (CRCL). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
BB Seguridade Participacoes SA and Circle Internet Group, Inc. are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that BBSEY is likely seeing its earnings outlook improve to a greater extent. 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.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
BBSEY currently has a forward P/E ratio of 8.15, while CRCL has a forward P/E of 93.72. We also note that BBSEY has a PEG ratio of 2.51. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. CRCL currently has a PEG ratio of 3.91.
Another notable valuation metric for BBSEY is its P/B ratio of 5.65. 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, CRCL has a P/B of 6.57.
These are just a few of the metrics contributing to BBSEY's Value grade of B and CRCL's Value grade of D.
BBSEY sticks out from CRCL in both our Zacks Rank and Style Scores models, so value investors will likely feel that BBSEY is the better option right now.
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BB Seguridade Participacoes SA (BBSEY): Free Stock Analysis Report Circle Internet Group, Inc. (CRCL): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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