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Investors with an interest in Medical - Biomedical and Genetics stocks have likely encountered both Exelixis (EXEL) and Techne (TECH). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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.
Exelixis has a Zacks Rank of #2 (Buy), while Techne has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that EXEL likely has seen a stronger improvement to its earnings outlook than TECH 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 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.
EXEL currently has a forward P/E ratio of 15.95, while TECH has a forward P/E of 34.39. We also note that EXEL has a PEG ratio of 1.05. 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. TECH currently has a PEG ratio of 2.52.
Another notable valuation metric for EXEL is its P/B ratio of 4.69. 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, TECH has a P/B of 4.96.
These are just a few of the metrics contributing to EXEL's Value grade of B and TECH's Value grade of C.
EXEL has seen stronger estimate revision activity and sports more attractive valuation metrics than TECH, 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
Bio-Techne Corp (TECH) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).