Investors looking for stocks in the Building Products - Retail sector might want to consider either Tecnoglass (TGLS) or Fastenal (FAST). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Currently, Tecnoglass has a Zacks Rank of #2 (Buy), while Fastenal has a Zacks Rank of #3 (Hold). This means that TGLS's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle for value investors.
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.
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.
TGLS currently has a forward P/E ratio of 10.15, while FAST has a forward P/E of 30.11. We also note that TGLS has a PEG ratio of 0.51. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. FAST currently has a PEG ratio of 3.35.
Another notable valuation metric for TGLS is its P/B ratio of 1.46. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, FAST has a P/B of 9.06.
Based on these metrics and many more, TGLS holds a Value grade of A, while FAST has a Value grade of C.
TGLS stands above FAST thanks to its solid earnings outlook, and based on these valuation figures, we also feel that TGLS is the superior value option right now.
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Tecnoglass Inc. (TGLS) : Free Stock Analysis Report
Fastenal Company (FAST) : Free Stock Analysis Report
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