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MCFT vs. POOL: Which Stock Should Value Investors Buy Now?

Zacks Equity Research

Investors looking for stocks in the Leisure and Recreation Products sector might want to consider either MasterCraft Boat Holdings, Inc. (MCFT) or Pool Corp. (POOL). 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 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.

Currently, MasterCraft Boat Holdings, Inc. has a Zacks Rank of #2 (Buy), while Pool Corp. has a Zacks Rank of #4 (Sell). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that MCFT is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether 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.

MCFT currently has a forward P/E ratio of 6.06, while POOL has a forward P/E of 33.52. We also note that MCFT has a PEG ratio of 0.61. 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 1.43.

Another notable valuation metric for MCFT is its P/B ratio of 3.61. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, POOL has a P/B of 20.93.

These metrics, and several others, help MCFT earn a Value grade of A, while POOL has been given a Value grade of D.

MCFT sticks out from POOL in both our Zacks Rank and Style Scores models, so value investors will likely feel that MCFT is the better option right now.


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MASTERCRAFT BOAT HOLDINGS, INC. (MCFT) : Free Stock Analysis Report
 
Pool Corporation (POOL) : Free Stock Analysis Report
 
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