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STRT or SHYF: Which Is the Better Value Stock Right Now?

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Zacks Equity Research
·2 min read
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Investors looking for stocks in the Automotive - Original Equipment sector might want to consider either Strattec Security (STRT) or Spartan Motors (SHYF). 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.

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 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.

Strattec Security and Spartan Motors are sporting Zacks Ranks of #1 (Strong Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that STRT 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.

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.

STRT currently has a forward P/E ratio of 9.70, while SHYF has a forward P/E of 18.93. We also note that STRT has a PEG ratio of 0.65. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. SHYF currently has a PEG ratio of 0.95.

Another notable valuation metric for STRT is its P/B ratio of 1.03. 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, SHYF has a P/B of 5.37.

These are just a few of the metrics contributing to STRT's Value grade of A and SHYF's Value grade of C.

STRT stands above SHYF thanks to its solid earnings outlook, and based on these valuation figures, we also feel that STRT is the superior value option right now.


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