Investors interested in stocks from the Electronics - Miscellaneous Components sector have probably already heard of Alps Electric (APELY) and OSI Systems (OSIS). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Right now, Alps Electric is sporting a Zacks Rank of #1 (Strong Buy), while OSI Systems has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that APELY has an improving earnings outlook. But this is only part of the picture 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.
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.
APELY currently has a forward P/E ratio of 17, while OSIS has a forward P/E of 20.46. We also note that APELY has a PEG ratio of 0.44. 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. OSIS currently has a PEG ratio of 1.59.
Another notable valuation metric for APELY is its P/B ratio of 0.74. 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, OSIS has a P/B of 3.85.
These metrics, and several others, help APELY earn a Value grade of A, while OSIS has been given a Value grade of C.
APELY has seen stronger estimate revision activity and sports more attractive valuation metrics than OSIS, so it seems like value investors will conclude that APELY is the superior option right now.
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Alps Electric (APELY): Free Stock Analysis Report OSI Systems, Inc. (OSIS): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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