Investors looking for stocks in the Medical - Biomedical and Genetics sector might want to consider either Anika Therapeutics (ANIK) or Techne (TECH). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Anika Therapeutics has a Zacks Rank of #2 (Buy), while Techne has a Zacks Rank of #3 (Hold) right now. This means that ANIK'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 tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
ANIK currently has a forward P/E ratio of 21.28, while TECH has a forward P/E of 35.14. We also note that ANIK has a PEG ratio of 2.13. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. TECH currently has a PEG ratio of 2.34.
Another notable valuation metric for ANIK is its P/B ratio of 1.90. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, TECH has a P/B of 5.37.
These are just a few of the metrics contributing to ANIK's Value grade of A and TECH's Value grade of D.
ANIK has seen stronger estimate revision activity and sports more attractive valuation metrics than TECH, so it seems like value investors will conclude that ANIK is the superior option right now.