Investors looking for stocks in the Business - Services sector might want to consider either General Finance (GFN) or WNS (Holdings) Limited (WNS). But which of these two companies is the best option for those looking for undervalued stocks? 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Currently, General Finance has a Zacks Rank of #2 (Buy), while WNS (Holdings) Limited has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that GFN has an improving earnings outlook. 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.
GFN currently has a forward P/E ratio of 12.92, while WNS has a forward P/E of 20.99. We also note that GFN has a PEG ratio of 1.17. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. WNS currently has a PEG ratio of 1.70.
Another notable valuation metric for GFN is its P/B ratio of 1.92. 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, WNS has a P/B of 5.42.
These are just a few of the metrics contributing to GFN's Value grade of A and WNS's Value grade of C.
GFN sticks out from WNS in both our Zacks Rank and Style Scores models, so value investors will likely feel that GFN is the better option right now.
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General Finance Corporation (GFN) : Free Stock Analysis Report
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