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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.
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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, General Finance has a Zacks Rank of #2 (Buy), while WNS Holdings Limited 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 GFN is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its 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 26.59, while WNS has a forward P/E of 27.44. We also note that GFN has a PEG ratio of 2.22. 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. WNS currently has a PEG ratio of 3.62.
Another notable valuation metric for GFN is its P/B ratio of 1.94. 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, WNS has a P/B of 5.30.
These metrics, and several others, help GFN earn a Value grade of A, while WNS has been given a 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
WNS Holdings Limited (WNS) : Free Stock Analysis Report
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