MCFT vs. POOL: Which Stock Should Value Investors Buy Now?
Investors looking for stocks in the Leisure and Recreation Products sector might want to consider either MCBC Holdings (MCFT) or Pool Corp. (POOL). 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 is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
MCBC Holdings has a Zacks Rank of #1 (Strong Buy), while Pool Corp. has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that MCFT has an improving earnings outlook. But this is just one piece of the puzzle 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.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
MCFT currently has a forward P/E ratio of 9.73, while POOL has a forward P/E of 27.05. We also note that MCFT has a PEG ratio of 0.65. 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. POOL currently has a PEG ratio of 1.15.
Another notable valuation metric for MCFT is its P/B ratio of 8.57. 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, POOL has a P/B of 16.46.
Based on these metrics and many more, MCFT holds a Value grade of B, while POOL has a Value grade of C.
MCFT stands above POOL thanks to its solid earnings outlook, and based on these valuation figures, we also feel that MCFT is the superior value option right now.
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MCBC Holdings, Inc. (MCFT) : Free Stock Analysis Report
Pool Corporation (POOL) : Free Stock Analysis Report
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