We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
MGA vs. GNTX: Which Stock Should Value Investors Buy Now?
Read MoreHide Full Article
Investors looking for stocks in the Automotive - Original Equipment sector might want to consider either Magna (MGA - Free Report) or Gentex (GNTX - Free Report) . 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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Magna and Gentex are sporting Zacks Ranks of #1 (Strong Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that MGA has an improving earnings outlook. 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.
MGA currently has a forward P/E ratio of 12.55, while GNTX has a forward P/E of 18.33. We also note that MGA has a PEG ratio of 1.78. 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. GNTX currently has a PEG ratio of 3.91.
Another notable valuation metric for MGA is its P/B ratio of 2.39. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, GNTX has a P/B of 4.65.
These metrics, and several others, help MGA earn a Value grade of A, while GNTX has been given a Value grade of C.
MGA has seen stronger estimate revision activity and sports more attractive valuation metrics than GNTX, so it seems like value investors will conclude that MGA is the superior option right now.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
MGA vs. GNTX: Which Stock Should Value Investors Buy Now?
Investors looking for stocks in the Automotive - Original Equipment sector might want to consider either Magna (MGA - Free Report) or Gentex (GNTX - Free Report) . 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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Magna and Gentex are sporting Zacks Ranks of #1 (Strong Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that MGA has an improving earnings outlook. 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.
MGA currently has a forward P/E ratio of 12.55, while GNTX has a forward P/E of 18.33. We also note that MGA has a PEG ratio of 1.78. 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. GNTX currently has a PEG ratio of 3.91.
Another notable valuation metric for MGA is its P/B ratio of 2.39. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, GNTX has a P/B of 4.65.
These metrics, and several others, help MGA earn a Value grade of A, while GNTX has been given a Value grade of C.
MGA has seen stronger estimate revision activity and sports more attractive valuation metrics than GNTX, so it seems like value investors will conclude that MGA is the superior option right now.