ST vs. TRNS: Which Stock Is the Better Value Option?
Investors interested in Instruments - Control stocks are likely familiar with Sensata (ST) and Transcat, Inc. (TRNS). 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.
Currently, both Sensata and Transcat, Inc. are holding a Zacks Rank of # 2 (Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. 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 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.
ST currently has a forward P/E ratio of 15.86, while TRNS has a forward P/E of 37.23. We also note that ST has a PEG ratio of 1.44. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. TRNS currently has a PEG ratio of 4.65.
Another notable valuation metric for ST is its P/B ratio of 3.07. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, TRNS has a P/B of 6.25.
These metrics, and several others, help ST earn a Value grade of B, while TRNS has been given a Value grade of D.
Both ST and TRNS are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that ST is the superior value option right now.
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Sensata Technologies Holding N.V. (ST): Free Stock Analysis Report
Transcat, Inc. (TRNS): 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.