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OSIS vs. LFUS: Which Stock Is the Better Value Option?

OSIS vs. LFUS: Which Stock Is the Better Value Option?

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This story originally appeared on Zacks

Investors interested in stocks from the Electronics - Miscellaneous Components sector have probably already heard of OSI Systems (OSIS) and Littelfuse (LFUS). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

- Zacks

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.

Both OSI Systems and Littelfuse have a Zacks Rank of # 2 (Buy) right now. This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. But this is only part of the picture for value investors.

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.

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.

OSIS currently has a forward P/E ratio of 16.23, while LFUS has a forward P/E of 24.83. We also note that OSIS has a PEG ratio of 1.48. 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. LFUS currently has a PEG ratio of 2.07.

Another notable valuation metric for OSIS is its P/B ratio of 2.72. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, LFUS has a P/B of 4.25.

These are just a few of the metrics contributing to OSIS's Value grade of A and LFUS's Value grade of C.

Both OSIS and LFUS are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that OSIS is the superior value option right now.



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OSI Systems, Inc. (OSIS): Free Stock Analysis Report

 

Littelfuse, Inc. (LFUS): Free Stock Analysis Report

 

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