Investors looking for stocks in the Automotive - Original Equipment sector might want to consider either Oshkosh (OSK) or Gentherm (THRM). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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, Oshkosh has a Zacks Rank of #2 (Buy), while Gentherm 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 OSK is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.
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.
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.
OSK currently has a forward P/E ratio of 9.28, while THRM has a forward P/E of 19.49. We also note that OSK has a PEG ratio of 0.74. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. THRM currently has a PEG ratio of 1.50.
Another notable valuation metric for OSK is its P/B ratio of 1.97. 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, THRM has a P/B of 2.90.
Based on these metrics and many more, OSK holds a Value grade of A, while THRM has a Value grade of C.
OSK has seen stronger estimate revision activity and sports more attractive valuation metrics than THRM, so it seems like value investors will conclude that OSK is the superior option right now.
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Oshkosh Corporation (OSK) : Free Stock Analysis Report
Gentherm Inc (THRM) : Free Stock Analysis Report
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