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TGLS vs. LL: Which Stock Is the Better Value Option?

Zacks Equity Research
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Investors looking for stocks in the Building Products - Retail sector might want to consider either Tecnoglass (TGLS) or Lumber Liquidators Holdings (LL). 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.

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 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, Tecnoglass has a Zacks Rank of #2 (Buy), while Lumber Liquidators Holdings has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that TGLS is likely seeing its earnings outlook improve to a greater extent. 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 Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

TGLS currently has a forward P/E ratio of 14.35, while LL has a forward P/E of 36.56. We also note that TGLS has a PEG ratio of 0.72. 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. LL currently has a PEG ratio of 1.33.

Another notable valuation metric for TGLS is its P/B ratio of 2.42. 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, LL has a P/B of 2.56.

These metrics, and several others, help TGLS earn a Value grade of A, while LL has been given a Value grade of C.

TGLS sticks out from LL in both our Zacks Rank and Style Scores models, so value investors will likely feel that TGLS is the better option right now.


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Tecnoglass Inc. (TGLS) : Free Stock Analysis Report
 
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