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STRT vs. MBLY: Which Stock Is the Better Value Option?
Investors with an interest in Automotive - Original Equipment stocks have likely encountered both Strattec Security (STRT - Free Report) and Mobileye Global (MBLY - 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 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.
Currently, Strattec Security has a Zacks Rank of #1 (Strong Buy), while Mobileye Global has a Zacks Rank of #4 (Sell). Investors should feel comfortable knowing that STRT likely has seen a stronger improvement to its earnings outlook than MBLY has recently. However, value investors will care about much more than just this.
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.
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 10.33, while MBLY has a forward P/E of 48.96. We also note that STRT has a PEG ratio of 1.03. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. MBLY currently has a PEG ratio of 1.92.
Another notable valuation metric for STRT is its P/B ratio of 0.69. 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, MBLY has a P/B of 0.96.
These are just a few of the metrics contributing to STRT's Value grade of A and MBLY's Value grade of F.
STRT has seen stronger estimate revision activity and sports more attractive valuation metrics than MBLY, so it seems like value investors will conclude that STRT is the superior option right now.