GM vs. FOXF: Which Stock Should Value Investors Buy Now?
Investors interested in stocks from the Automotive - Domestic sector have probably already heard of General Motors Company (GM) and Fox Factory Holding (FOXF). 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.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Currently, General Motors Company has a Zacks Rank of #2 (Buy), while Fox Factory Holding has a Zacks Rank of #4 (Sell). Investors should feel comfortable knowing that GM likely has seen a stronger improvement to its earnings outlook than FOXF has recently. 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.
GM currently has a forward P/E ratio of 4.40, while FOXF has a forward P/E of 21.83. We also note that GM has a PEG ratio of 0.45. 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. FOXF currently has a PEG ratio of 2.10.
Another notable valuation metric for GM is its P/B ratio of 0.61. 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, FOXF has a P/B of 3.89.
These metrics, and several others, help GM earn a Value grade of A, while FOXF has been given a Value grade of C.
GM has seen stronger estimate revision activity and sports more attractive valuation metrics than FOXF, so it seems like value investors will conclude that GM is the superior option right now.
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General Motors Company (GM) : Free Stock Analysis Report
Fox Factory Holding Corp. (FOXF) : Free Stock Analysis Report
