Investors interested in stocks from the Medical - Products sector have probably already heard of NuVasive (NUVA) and Haemonetics (HAE). 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 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, both NuVasive and Haemonetics are holding a Zacks Rank of # 2 (Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. But this is just one piece of the puzzle for value investors.
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.
NUVA currently has a forward P/E ratio of 31.48, while HAE has a forward P/E of 38.37. We also note that NUVA has a PEG ratio of 2.47. 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. HAE currently has a PEG ratio of 2.84.
Another notable valuation metric for NUVA is its P/B ratio of 4.44. 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, HAE has a P/B of 10.53.
Based on these metrics and many more, NUVA holds a Value grade of B, while HAE has a Value grade of C.
Both NUVA and HAE are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that NUVA is the superior value option right now.
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NuVasive, Inc. (NUVA) : Free Stock Analysis Report
Haemonetics Corporation (HAE) : Free Stock Analysis Report
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