Investors looking for stocks in the Consumer Products - Discretionary sector might want to consider either PCM (PCMI) or SodaStream (SODA). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, both PCM and SodaStream are holding a Zacks Rank of # 1 (Strong Buy). This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. But this is just one piece of the puzzle 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.
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.
PCMI currently has a forward P/E ratio of 11.31, while SODA has a forward P/E of 29.16. We also note that PCMI has a PEG ratio of 0.57. 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. SODA currently has a PEG ratio of 3.89.
Another notable valuation metric for PCMI is its P/B ratio of 1.97. 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, SODA has a P/B of 5.29.
Based on these metrics and many more, PCMI holds a Value grade of B, while SODA has a Value grade of F.
Both PCMI and SODA are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that PCMI is the superior value option right now.
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PCM, Inc. (PCMI) : Free Stock Analysis Report
SodaStream International Ltd. (SODA) : Free Stock Analysis Report
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