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SHYF vs. RACE: Which Stock Should Value Investors Buy Now?

SHYF vs. RACE: Which Stock Is the Better Value Option?

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This story originally appeared on Zacks

Investors looking for stocks in the Automotive - Original Equipment sector might want to consider either The Shyft Group (SHYF) or Ferrari (RACE). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

- 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 is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

The Shyft Group has a Zacks Rank of #2 (Buy), while Ferrari has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that SHYF has 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 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.

SHYF currently has a forward P/E ratio of 23.87, while RACE has a forward P/E of 51.85. We also note that SHYF has a PEG ratio of 0.85. 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. RACE currently has a PEG ratio of 3.34.

Another notable valuation metric for SHYF is its P/B ratio of 6.87. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, RACE has a P/B of 19.06.

These are just a few of the metrics contributing to SHYF's Value grade of B and RACE's Value grade of D.

SHYF stands above RACE thanks to its solid earnings outlook, and based on these valuation figures, we also feel that SHYF is the superior value option right now.



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