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III or ACN: Which Is the Better Value Stock Right Now?


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Investors looking for stocks in the Consulting Services sector might want to consider either Information Services Group (III) or Accenture (ACN). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

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 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.

Right now, Information Services Group is sporting a Zacks Rank of #1 (Strong Buy), while Accenture has a Zacks Rank of #4 (Sell). This means that III'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.

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.

III currently has a forward P/E ratio of 9.88, while ACN has a forward P/E of 22.83. We also note that III has a PEG ratio of 0.71. 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. ACN currently has a PEG ratio of 2.21.

Another notable valuation metric for III is its P/B ratio of 2.45. 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, ACN has a P/B of 9.81.

These are just a few of the metrics contributing to III's Value grade of A and ACN's Value grade of D.

III has seen stronger estimate revision activity and sports more attractive valuation metrics than ACN, so it seems like value investors will conclude that III is the superior option right now.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



This article appears in: Investing , Investing Ideas , Stocks
Referenced Symbols: III , ACN



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