Investors interested in stocks from the Building Products - Retail sector have probably already heard of Tecnoglass (TGLS) and Lumber Liquidators Holdings (LL). But which of these two stocks presents investors with the better value opportunity right now? 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Tecnoglass and Lumber Liquidators Holdings are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This means that TGLS's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether 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 14.47, while LL has a forward P/E of 28.58. We also note that TGLS has a PEG ratio of 0.72. 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. LL currently has a PEG ratio of 1.04.
Another notable valuation metric for TGLS is its P/B ratio of 2.44. 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, LL has a P/B of 2.56.
These are just a few of the metrics contributing to TGLS's Value grade of A and LL's Value grade of C.
TGLS 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 TGLS is likely the superior value option right now.
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Tecnoglass Inc. (TGLS): Free Stock Analysis Report
Lumber Liquidators Holdings, Inc (LL): 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.
