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III vs. FC: Which Stock Is the Better Value Option?

III vs. FC: Which Stock Is the Better Value Option?

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This story originally appeared on Zacks

Investors interested in Consulting Services stocks are likely familiar with Information Services Group (III) and Franklin Covey (FC). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

- Zacks

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.

Information Services Group and Franklin Covey 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 III 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 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 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.

III currently has a forward P/E ratio of 21.40, while FC has a forward P/E of 80.27. We also note that III has a PEG ratio of 1.22. 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. FC currently has a PEG ratio of 3.21.

Another notable valuation metric for III is its P/B ratio of 3.87. 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, FC has a P/B of 8.02.

These metrics, and several others, help III earn a Value grade of B, while FC has been given a Value grade of C.

III has seen stronger estimate revision activity and sports more attractive valuation metrics than FC, so it seems like value investors will conclude that III is the superior option right now.



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Information Services Group, Inc. (III): Free Stock Analysis Report

 

Franklin Covey Company (FC): Free Stock Analysis Report

 

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