Markets

ADRNY vs. PRPL: Which Stock Should Value Investors Buy Now?

Investors looking for stocks in the Consumer Products - Staples sector might want to consider either Ahold NV (ADRNY) or PURPLE INNOVATION, INC. (PRPL). But which of these two companies is the best option for those looking for undervalued stocks? Let's 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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Ahold NV has a Zacks Rank of #2 (Buy), while PURPLE INNOVATION, INC. has a Zacks Rank of #3 (Hold) right now. This means that ADRNY's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle for value investors.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when 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.

ADRNY currently has a forward P/E ratio of 10.84, while PRPL has a forward P/E of 43.23. We also note that ADRNY has a PEG ratio of 2.29. 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. PRPL currently has a PEG ratio of 2.88.

Another notable valuation metric for ADRNY is its P/B ratio of 2.10. 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, PRPL has a P/B of 69.46.

These are just a few of the metrics contributing to ADRNY's Value grade of A and PRPL's Value grade of C.

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


Click to get this free report

Ahold NV (ADRNY): Free Stock Analysis Report

PURPLE INNOVATION, INC. (PRPL): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

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

Latest Markets Videos

Zacks

Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

Learn More