Investors with an interest in Consumer Products - Discretionary stocks have likely encountered both PCM (PCMI) and Colruyt SA Unsponsored ADR (CUYTY). But which of these two companies is the best option for those looking for undervalued stocks? Let's 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
PCM and Colruyt SA Unsponsored ADR are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that PCMI likely has seen a stronger improvement to its earnings outlook than CUYTY has recently. However, value investors will care about much more than just this.
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.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
PCMI currently has a forward P/E ratio of 13.94, while CUYTY has a forward P/E of 24.49. We also note that PCMI has a PEG ratio of 0.70. 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. CUYTY currently has a PEG ratio of 4.77.
Another notable valuation metric for PCMI is its P/B ratio of 2.86. 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, CUYTY has a P/B of 4.68.
Based on these metrics and many more, PCMI holds a Value grade of B, while CUYTY has a Value grade of C.
PCMI stands above CUYTY thanks to its solid earnings outlook, and based on these valuation figures, we also feel that PCMI is the superior value option right now.
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PCM, Inc. (PCMI) : Free Stock Analysis Report
Colruyt SA Unsponsored ADR (CUYTY) : Free Stock Analysis Report
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