Investors interested in stocks from the Building Products - Retail sector have probably already heard of Tecnoglass (TGLS) and Fastenal (FAST). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great 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, Tecnoglass has a Zacks Rank of #2 (Buy), while Fastenal has a Zacks Rank of #4 (Sell). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that TGLS is likely seeing its earnings outlook improve to a greater extent. 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.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
TGLS currently has a forward P/E ratio of 10.54, while FAST has a forward P/E of 18.71. We also note that TGLS has a PEG ratio of 0.53. 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. FAST currently has a PEG ratio of 1.34.
Another notable valuation metric for TGLS is its P/B ratio of 2.04. 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, FAST has a P/B of 6.45.
These are just a few of the metrics contributing to TGLS's Value grade of A and FAST's Value grade of D.
TGLS stands above FAST thanks to its solid earnings outlook, and based on these valuation figures, we also feel that TGLS is the superior value option right now.
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Tecnoglass Inc. (TGLS): Free Stock Analysis Report
Fastenal Company (FAST): 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.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
