Investors interested in stocks from the Industrial Services sector have probably already heard of Ashtead Group PLC (ASHTY) and DMC Global (BOOM). But which of these two companies is the best option for those looking for undervalued stocks? 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 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.
Right now, both Ashtead Group PLC and DMC Global are sporting a Zacks Rank of # 2 (Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. But this is just one factor that value investors are interested in.
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.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
ASHTY currently has a forward P/E ratio of 11.60, while BOOM has a forward P/E of 24.35. We also note that ASHTY has a PEG ratio of 0.53. 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. BOOM currently has a PEG ratio of 1.22.
Another notable valuation metric for ASHTY is its P/B ratio of 3.59. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, BOOM has a P/B of 6.88.
These metrics, and several others, help ASHTY earn a Value grade of A, while BOOM has been given a Value grade of C.
Both ASHTY and BOOM are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that ASHTY is the superior value option right now.
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Ashtead Group PLC (ASHTY) : Free Stock Analysis Report
DMC Global Inc. (BOOM) : Free Stock Analysis Report
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