Investors interested in stocks from the Electronics - Miscellaneous Components sector have probably already heard of Alps Electric (APELY) and Littelfuse (LFUS). 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.
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.
Currently, Alps Electric has a Zacks Rank of #1 (Strong Buy), while Littelfuse has a Zacks Rank of #2 (Buy). 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. But this is just one piece of the puzzle 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.
APELY currently has a forward P/E ratio of 26.80, while LFUS has a forward P/E of 28.52. We also note that APELY has a PEG ratio of 0.69. 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. LFUS currently has a PEG ratio of 2.38.
Another notable valuation metric for APELY is its P/B ratio of 1.06. 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, LFUS has a P/B of 3.8.
These are just a few of the metrics contributing to APELY's Value grade of A and LFUS's Value grade of D.
APELY stands above LFUS thanks to its solid earnings outlook, and based on these valuation figures, we also feel that APELY is the superior value option right now.
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Alps Electric (APELY): Free Stock Analysis Report
Littelfuse, Inc. (LFUS): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).