Back to top

Image: Bigstock

APELY vs. MRCY: Which Stock Is the Better Value Option?

Read MoreHide Full Article

Investors interested in Computer - Peripheral Equipment stocks are likely familiar with Alps Electric (APELY - Free Report) and Mercury Systems (MRCY - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Right now, Alps Electric is sporting a Zacks Rank of #2 (Buy), while Mercury Systems has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that APELY is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.

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.

APELY currently has a forward P/E ratio of 24.29, while MRCY has a forward P/E of 1,543.85. We also note that APELY has a PEG ratio of 0.61. 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. MRCY currently has a PEG ratio of 117.05.

Another notable valuation metric for APELY is its P/B ratio of 0.77. 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, MRCY has a P/B of 1.35.

Based on these metrics and many more, APELY holds a Value grade of A, while MRCY has a Value grade of F.

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


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Alps Electric (APELY) - free report >>

Mercury Systems Inc (MRCY) - free report >>

Published in