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WWD vs. AMOT: Which Stock Is the Better Value Option?

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Investors interested in stocks from the Instruments - Control sector have probably already heard of Woodward (WWD - Free Report) and Allied Motion Technologies . 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.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive 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.

Woodward has a Zacks Rank of #2 (Buy), while Allied Motion Technologies has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that WWD likely has seen a stronger improvement to its earnings outlook than AMOT has recently. But this is just one piece of the puzzle for value investors.

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.

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.

WWD currently has a forward P/E ratio of 22.37, while AMOT has a forward P/E of 28.09. We also note that WWD has a PEG ratio of 1.86. 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. AMOT currently has a PEG ratio of 4.01.

Another notable valuation metric for WWD is its P/B ratio of 3.45. 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, AMOT has a P/B of 4.76.

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

WWD is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that WWD is likely the superior value option right now.


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