TGLS vs. LL: Which Stock Is the Better Value Option?
Investors looking for stocks in the Building Products - Retail sector might want to consider either Tecnoglass (TGLS) or Lumber Liquidators Holdings (LL). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Right now, Tecnoglass is sporting a Zacks Rank of #2 (Buy), while Lumber Liquidators Holdings has a Zacks Rank of #5 (Strong Sell). Investors should feel comfortable knowing that TGLS likely has seen a stronger improvement to its earnings outlook than LL has recently. 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.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
TGLS currently has a forward P/E ratio of 9.66, while LL has a forward P/E of 24.57. We also note that TGLS has a PEG ratio of 0.48. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. LL currently has a PEG ratio of 0.82.
Another notable valuation metric for TGLS is its P/B ratio of 1.62. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, LL has a P/B of 4.31.
These metrics, and several others, help TGLS earn a Value grade of A, while LL has been given a Value grade of C.
TGLS has seen stronger estimate revision activity and sports more attractive valuation metrics than LL, so it seems like value investors will conclude that TGLS is the superior option right now.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Tecnoglass Inc. (TGLS) : Free Stock Analysis Report
Lumber Liquidators Holdings, Inc (LL) : Free Stock Analysis Report
To read this article on Zacks.com click here.
