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STRT or RACE: Which Is the Better Value Stock Right Now?

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Investors looking for stocks in the Automotive - Original Equipment sector might want to consider either Strattec Security (STRT - Free Report) or Ferrari (RACE - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Strattec Security and Ferrari are sporting Zacks Ranks of #1 (Strong Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that STRT is likely seeing its earnings outlook improve to a greater extent. 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 highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

STRT currently has a forward P/E ratio of 8.29, while RACE has a forward P/E of 39.70. We also note that STRT has a PEG ratio of 0.55. 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. RACE currently has a PEG ratio of 1.84.

Another notable valuation metric for STRT is its P/B ratio of 1.08. 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, RACE has a P/B of 17.79.

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

STRT stands above RACE thanks to its solid earnings outlook, and based on these valuation figures, we also feel that STRT is the superior value option right now.


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Strattec Security Corporation (STRT) - free report >>

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