Investors looking for stocks in the Medical - Drugs sector might want to consider either Amneal Pharmaceuticals (AMRX) or Collegium Pharmaceutical (COLL). But which of these two companies is the best option for those looking for undervalued stocks? 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, Amneal Pharmaceuticals has a Zacks Rank of #1 (Strong Buy), while Collegium Pharmaceutical 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 AMRX is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle 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.
AMRX currently has a forward P/E ratio of 8.19, while COLL has a forward P/E of 12.85. We also note that AMRX has a PEG ratio of 0.33. 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. COLL currently has a PEG ratio of 0.64.
Another notable valuation metric for AMRX is its P/B ratio of 3.47. 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, COLL has a P/B of 4.27.
Based on these metrics and many more, AMRX holds a Value grade of A, while COLL has a Value grade of C.
AMRX sticks out from COLL in both our Zacks Rank and Style Scores models, so value investors will likely feel that AMRX is the better option right now.
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AMNEAL PHARMACEUTICALS, INC. (AMRX) : Free Stock Analysis Report
Collegium Pharmaceutical, Inc. (COLL) : Free Stock Analysis Report
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