Investors interested in stocks from the Computer - Services sector have probably already heard of LogMein (LOGM) and ManTech International (MANT). But which of these two stocks presents investors with the better value opportunity right now? Let's 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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
LogMein has a Zacks Rank of #1 (Strong Buy), while ManTech International has a Zacks Rank of #2 (Buy) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that LOGM is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.
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 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.
LOGM currently has a forward P/E ratio of 14.21, while MANT has a forward P/E of 29.98. We also note that LOGM has a PEG ratio of 2.84. 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. MANT currently has a PEG ratio of 3.75.
Another notable valuation metric for LOGM is its P/B ratio of 1.28. 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, MANT has a P/B of 1.94.
These metrics, and several others, help LOGM earn a Value grade of B, while MANT has been given a Value grade of C.
LOGM has seen stronger estimate revision activity and sports more attractive valuation metrics than MANT, so it seems like value investors will conclude that LOGM is the superior option right now.
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LogMein, Inc. (LOGM) : Free Stock Analysis Report
ManTech International Corporation (MANT) : Free Stock Analysis Report
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