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Investors looking for stocks in the Medical - Biomedical and Genetics sector might want to consider either Exelixis (EXEL) or CSL Limited Sponsored ADR (CSLLY). But which of these two companies is the best option for those looking for undervalued stocks? 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Currently, Exelixis has a Zacks Rank of #2 (Buy), while CSL Limited Sponsored ADR has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that EXEL likely has seen a stronger improvement to its earnings outlook than CSLLY has recently. But this is only part of the picture 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.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
EXEL currently has a forward P/E ratio of 15.91, while CSLLY has a forward P/E of 29.44. We also note that EXEL has a PEG ratio of 0.53. 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. CSLLY currently has a PEG ratio of 2.
Another notable valuation metric for EXEL is its P/B ratio of 3.91. 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, CSLLY has a P/B of 5.02.
Based on these metrics and many more, EXEL holds a Value grade of B, while CSLLY has a Value grade of C.
EXEL has seen stronger estimate revision activity and sports more attractive valuation metrics than CSLLY, so it seems like value investors will conclude that EXEL is the superior option right now.
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Exelixis, Inc. (EXEL) : Free Stock Analysis Report
CSL Limited Sponsored ADR (CSLLY) : Free Stock Analysis Report