Investors interested in Automotive - Original Equipment stocks are likely familiar with Oshkosh (OSK) and Visteon (VC). 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Oshkosh and Visteon are sporting Zacks Ranks of #2 (Buy) and #5 (Strong Sell), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that OSK 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 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.
OSK currently has a forward P/E ratio of 9.49, while VC has a forward P/E of 14.04. We also note that OSK has a PEG ratio of 0.65. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. VC currently has a PEG ratio of 0.94.
Another notable valuation metric for OSK is its P/B ratio of 1.93. 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, VC has a P/B of 3.90.
These are just a few of the metrics contributing to OSK's Value grade of A and VC's Value grade of C.
OSK is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that OSK is likely the superior value option right now.
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Oshkosh Corporation (OSK) : Free Stock Analysis Report
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