ASR vs. RXO: Which Stock Should Value Investors Buy Now?
Investors interested in Transportation - Services stocks are likely familiar with Grupo Aeroportuario del Sureste (ASR) and RXO (RXO). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, Grupo Aeroportuario del Sureste has a Zacks Rank of #2 (Buy), while RXO has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that ASR is likely seeing its earnings outlook improve to a greater extent. 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 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.
ASR currently has a forward P/E ratio of 10.46, while RXO has a forward P/E of 72.14. We also note that ASR has a PEG ratio of 2.38. 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. RXO currently has a PEG ratio of 5.55.
Another notable valuation metric for ASR is its P/B ratio of 2.54. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, RXO has a P/B of 3.97.
These are just a few of the metrics contributing to ASR's Value grade of B and RXO's Value grade of C.
ASR has seen stronger estimate revision activity and sports more attractive valuation metrics than RXO, so it seems like value investors will conclude that ASR is the superior option right now.
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Grupo Aeroportuario del Sureste, S.A. de C.V. (ASR) : Free Stock Analysis Report
RXO INC (RXO) : Free Stock Analysis Report
