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HRC vs. BLFS: Which Stock Should Value Investors Buy Now?

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Investors looking for stocks in the Medical - Products sector might want to consider either Hill-Rom or BioLife Solutions, Inc. (BLFS - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Right now, Hill-Rom is sporting a Zacks Rank of #2 (Buy), while BioLife Solutions, Inc. has a Zacks Rank of #3 (Hold). This means that HRC'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 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 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.

HRC currently has a forward P/E ratio of 18.61, while BLFS has a forward P/E of 4,424. We also note that HRC has a PEG ratio of 2.57. 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. BLFS currently has a PEG ratio of 442.40.

Another notable valuation metric for HRC is its P/B ratio of 4.02. 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, BLFS has a P/B of 7.58.

These metrics, and several others, help HRC earn a Value grade of B, while BLFS has been given a Value grade of D.

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


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