Investors with an interest in Automotive - Original Equipment stocks have likely encountered both AB Volvo (VLVLY) and Gentex (GNTX). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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.
Right now, AB Volvo is sporting a Zacks Rank of #2 (Buy), while Gentex has a Zacks Rank of #3 (Hold). This means that VLVLY's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture for value investors.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.
VLVLY currently has a forward P/E ratio of 9.64, while GNTX has a forward P/E of 13.49. We also note that VLVLY has a PEG ratio of 1.93. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. GNTX currently has a PEG ratio of 2.25.
Another notable valuation metric for VLVLY is its P/B ratio of 2.39. 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, GNTX has a P/B of 3.08.
These are just a few of the metrics contributing to VLVLY's Value grade of A and GNTX's Value grade of C.
VLVLY has seen stronger estimate revision activity and sports more attractive valuation metrics than GNTX, so it seems like value investors will conclude that VLVLY is the superior option right now.
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AB Volvo (VLVLY) : Free Stock Analysis Report
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