Investors with an interest in Automotive - Domestic stocks have likely encountered both Paccar (PCAR) and Fox Factory Holding (FOXF). 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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Right now, Paccar is sporting a Zacks Rank of #2 (Buy), while Fox Factory Holding has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that PCAR has an improving earnings outlook. But this is just one factor that value investors are interested in.
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.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
PCAR currently has a forward P/E ratio of 10.69, while FOXF has a forward P/E of 30.02. We also note that PCAR has a PEG ratio of 1.27. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. FOXF currently has a PEG ratio of 1.99.
Another notable valuation metric for PCAR is its P/B ratio of 2.70. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, FOXF has a P/B of 8.96.
These metrics, and several others, help PCAR earn a Value grade of A, while FOXF has been given a Value grade of F.
PCAR stands above FOXF thanks to its solid earnings outlook, and based on these valuation figures, we also feel that PCAR is the superior value option right now.
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PACCAR Inc. (PCAR) : Free Stock Analysis Report
Fox Factory Holding Corp. (FOXF) : Free Stock Analysis Report
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