FMS or SMLR: Which Is the Better Value Stock Right Now?
Investors interested in Medical - Instruments stocks are likely familiar with Fresenius (FMS) and Semler Scientific Inc. (SMLR). 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Fresenius has a Zacks Rank of #2 (Buy), while Semler Scientific Inc. has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that FMS likely has seen a stronger improvement to its earnings outlook than SMLR has recently. But this is only part of the picture for value investors.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.
FMS currently has a forward P/E ratio of 16.48, while SMLR has a forward P/E of 57.75. We also note that FMS has a PEG ratio of 2.15. 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. SMLR currently has a PEG ratio of 2.31.
Another notable valuation metric for FMS is its P/B ratio of 1.75. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, SMLR has a P/B of 20.82.
Based on these metrics and many more, FMS holds a Value grade of A, while SMLR has a Value grade of C.
FMS 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 FMS is likely the superior value option right now.
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Fresenius Medical Care AG Co. KGaA (FMS): Free Stock Analysis Report
Semler Scientific Inc. (SMLR): Free Stock Analysis Report
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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.