Investors with an interest in Chemical - Specialty stocks have likely encountered both Green Plains Renewable Energy (GPRE) and Hawkins (HWKN). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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.
Green Plains Renewable Energy has a Zacks Rank of #2 (Buy), while Hawkins has a Zacks Rank of #3 (Hold) right now. This means that GPRE'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.
GPRE currently has a forward P/E ratio of 24.56, while HWKN has a forward P/E of 37.14. We also note that GPRE has a PEG ratio of 0.72. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. HWKN currently has a PEG ratio of 2.32.
Another notable valuation metric for GPRE is its P/B ratio of 0.88. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, HWKN has a P/B of 6.18.
Based on these metrics and many more, GPRE holds a Value grade of A, while HWKN has a Value grade of C.
GPRE has seen stronger estimate revision activity and sports more attractive valuation metrics than HWKN, so it seems like value investors will conclude that GPRE is the superior option right now.
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Green Plains, Inc. (GPRE): Free Stock Analysis Report Hawkins, Inc. (HWKN): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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