Investors with an interest in Medical - Instruments stocks have likely encountered both Coloplast A/S Sponsored ADR (CLPBY) and Penumbra (PEN). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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.
Coloplast A/S Sponsored ADR and Penumbra are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that CLPBY has an improving earnings outlook. But this is just one factor that value investors are interested in.
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 Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
CLPBY currently has a forward P/E ratio of 21.75, while PEN has a forward P/E of 63.30. We also note that CLPBY has a PEG ratio of 0.84. 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. PEN currently has a PEG ratio of 1.97.
Another notable valuation metric for CLPBY is its P/B ratio of 8.32. 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 9.29.
Based on these metrics and many more, CLPBY holds a Value grade of B, while PEN has a Value grade of D.
CLPBY stands above PEN thanks to its solid earnings outlook, and based on these valuation figures, we also feel that CLPBY is the superior value option right now.
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Download Atomic Opportunity: Nuclear Energy's Comeback free today.Coloplast A/S Sponsored ADR (CLPBY) : Free Stock Analysis Report
Penumbra, Inc. (PEN) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
