Investors interested in stocks from the Consumer Products - Discretionary sector have probably already heard of Lifetime Brands (LCUT) and SharkNinja, Inc. (SN). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Lifetime Brands has a Zacks Rank of #1 (Strong Buy), while SharkNinja, Inc. has a Zacks Rank of #2 (Buy) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that LCUT has an improving earnings outlook. But this is only part of the picture for value investors.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their 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.
LCUT currently has a forward P/E ratio of 12.59, while SN has a forward P/E of 29.87. We also note that LCUT has a PEG ratio of 0.90. 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. SN currently has a PEG ratio of 2.08.
Another notable valuation metric for LCUT is its P/B ratio of 0.97. 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, SN has a P/B of 9.19.
These metrics, and several others, help LCUT earn a Value grade of A, while SN has been given a Value grade of F.
LCUT is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that LCUT is likely the superior value option right now.
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