CSLLY or TECH: Which Is the Better Value Stock Right Now?

Investors interested in Medical - Biomedical and Genetics stocks are likely familiar with CSL Limited Sponsored ADR (CSLLY) and Techne (TECH). 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.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. 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.

CSL Limited Sponsored ADR and Techne are sporting Zacks Ranks of #2 (Buy) and #4 (Sell), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that CSLLY has an improving earnings outlook. But this is just one piece of the puzzle for value investors.

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.

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.

CSLLY currently has a forward P/E ratio of 18.08, while TECH has a forward P/E of 32.34. We also note that CSLLY has a PEG ratio of 1.77. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. TECH currently has a PEG ratio of 3.72.

Another notable valuation metric for CSLLY is its P/B ratio of 2.88. 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, TECH has a P/B of 5.07.

Based on these metrics and many more, CSLLY holds a Value grade of B, while TECH has a Value grade of D.

CSLLY 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 CSLLY is likely the superior value option right now.

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This article originally published on Zacks Investment Research (zacks.com).

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