Investors with an interest in Steel - Speciality stocks have likely encountered both Insteel Industries (IIIN) and NWPX Infrastructure (NWPX). But which of these two stocks presents investors with the better value opportunity right now? 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Currently, Insteel Industries has a Zacks Rank of #2 (Buy), while NWPX Infrastructure 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 IIIN is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture for value investors.
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 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.
IIIN currently has a forward P/E ratio of 12.00, while NWPX has a forward P/E of 19.31. We also note that IIIN has a PEG ratio of 1.00. 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. NWPX currently has a PEG ratio of 1.76.
Another notable valuation metric for IIIN is its P/B ratio of 1.51. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, NWPX has a P/B of 2.41.
These are just a few of the metrics contributing to IIIN's Value grade of B and NWPX's Value grade of C.
IIIN 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 IIIN is likely the superior value option right now.
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Insteel Industries, Inc. (IIIN): Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).