Investors interested in Instruments - Control stocks are likely familiar with Allied Motion Technologies (AMOT) and Transcat, Inc. (TRNS). But which of these two companies is the best option for those looking for undervalued stocks? 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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, Allied Motion Technologies has a Zacks Rank of #2 (Buy), while Transcat, Inc. has a Zacks Rank of #5 (Strong Sell). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that AMOT is likely seeing its earnings outlook improve to a greater extent. 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.
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.
AMOT currently has a forward P/E ratio of 17.70, while TRNS has a forward P/E of 49.98. We also note that AMOT has a PEG ratio of 1.77. 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. TRNS currently has a PEG ratio of 6.25.
Another notable valuation metric for AMOT is its P/B ratio of 3.32. 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 6.98.
Based on these metrics and many more, AMOT holds a Value grade of B, while TRNS has a Value grade of F.
AMOT has seen stronger estimate revision activity and sports more attractive valuation metrics than TRNS, so it seems like value investors will conclude that AMOT is the superior option right now.
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Allied Motion Technologies, Inc. (AMOT) : Free Stock Analysis Report
Transcat, Inc. (TRNS) : Free Stock Analysis Report
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