Investors with an interest in Medical - Instruments stocks have likely encountered both Integer (ITGR) and Penumbra (PEN). But which of these two stocks presents investors with the better value opportunity right now? 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.
Currently, Integer has a Zacks Rank of #2 (Buy), while Penumbra has a Zacks Rank of #3 (Hold). This means that ITGR's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture for value investors.
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 highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
ITGR currently has a forward P/E ratio of 19.02, while PEN has a forward P/E of 68.78. We also note that ITGR has a PEG ratio of 1.04. 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. PEN currently has a PEG ratio of 2.28.
Another notable valuation metric for ITGR is its P/B ratio of 2.62. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, PEN has a P/B of 8.16.
These are just a few of the metrics contributing to ITGR's Value grade of B and PEN's Value grade of D.
ITGR has seen stronger estimate revision activity and sports more attractive valuation metrics than PEN, so it seems like value investors will conclude that ITGR is the superior option right now.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Integer Holdings Corporation (ITGR): Free Stock Analysis Report Penumbra, Inc. (PEN): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
