Investors interested in Medical - Instruments stocks are likely familiar with Integer (ITGR) and SONOVA HOLDING (SONVY). But which of these two stocks presents investors with the better value opportunity right now? Let's 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 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.
Currently, Integer has a Zacks Rank of #1 (Strong Buy), while SONOVA HOLDING has a Zacks Rank of #4 (Sell). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that ITGR is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.
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 Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
ITGR currently has a forward P/E ratio of 18.77, while SONVY has a forward P/E of 25.39. We also note that ITGR has a PEG ratio of 1.02. 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. SONVY currently has a PEG ratio of 3.44.
Another notable valuation metric for ITGR is its P/B ratio of 2.58. 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, SONVY has a P/B of 7.47.
These are just a few of the metrics contributing to ITGR's Value grade of B and SONVY's Value grade of D.
ITGR 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 ITGR is likely the superior value option right now.
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Integer Holdings Corporation (ITGR): Free Stock Analysis Report SONOVA HOLDING (SONVY): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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