OSK vs. RACE: Which Stock Is the Better Value Option?
Investors with an interest in Automotive - Original Equipment stocks have likely encountered both Oshkosh (OSK) and Ferrari (RACE). But which of these two stocks presents investors with the better value opportunity right now? 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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Oshkosh has a Zacks Rank of #2 (Buy), while Ferrari has a Zacks Rank of #3 (Hold) 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 only part of the picture for value investors.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks 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.
OSK currently has a forward P/E ratio of 12.53, while RACE has a forward P/E of 37.16. We also note that OSK has a PEG ratio of 0.69. 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. RACE currently has a PEG ratio of 2.15.
Another notable valuation metric for OSK is its P/B ratio of 2.28. 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, RACE has a P/B of 23.18.
These are just a few of the metrics contributing to OSK's Value grade of B and RACE's Value grade of F.
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
Ferrari N.V. (RACE) : Free Stock Analysis Report
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