Investors with an interest in Consumer Products - Discretionary stocks have likely encountered both PCM (PCMI) and SodaStream (SODA). But which of these two stocks presents investors with the better value opportunity right now? 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 Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Currently, both PCM and SodaStream are holding a Zacks Rank of # 1 (Strong Buy). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. However, value investors will care about much more than just this.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether 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.
PCMI currently has a forward P/E ratio of 9.89, while SODA has a forward P/E of 32.02. We also note that PCMI has a PEG ratio of 0.49. 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 4.27.
Another notable valuation metric for PCMI is its P/B ratio of 1.85. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, SODA has a P/B of 5.81.
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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