Yahoo Finance LW vs. CELH: Which Stock Should Value Investors Buy Now?
Investors looking for stocks in the Food - Miscellaneous sector might want to consider either Lamb Weston (LW) or Celsius Holdings Inc. (CELH). 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Lamb Weston and Celsius Holdings Inc. are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that LW is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.
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.
LW currently has a forward P/E ratio of 13.97, while CELH has a forward P/E of 56.75. We also note that LW has a PEG ratio of 1.26. 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. CELH currently has a PEG ratio of 1.75.
Another notable valuation metric for LW is its P/B ratio of 7.08. 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, CELH has a P/B of 42.38.
Based on these metrics and many more, LW holds a Value grade of B, while CELH has a Value grade of D.
LW has seen stronger estimate revision activity and sports more attractive valuation metrics than CELH, so it seems like value investors will conclude that LW is the superior option right now.
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Lamb Weston (LW) : Free Stock Analysis Report
Celsius Holdings Inc. (CELH) : Free Stock Analysis Report
