Yahoo Finance III or IT: Which Is the Better Value Stock Right Now?
Investors interested in stocks from the Consulting Services sector have probably already heard of Information Services Group (III) and Gartner (IT). 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 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.
Right now, Information Services Group is sporting a Zacks Rank of #2 (Buy), while Gartner has a Zacks Rank of #4 (Sell). This means that III's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.
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.
III currently has a forward P/E ratio of 7.89, while IT has a forward P/E of 41.28. We also note that III has a PEG ratio of 0.53. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. IT currently has a PEG ratio of 4.28.
Another notable valuation metric for III is its P/B ratio of 1.92. 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, IT has a P/B of 53.98.
These metrics, and several others, help III earn a Value grade of A, while IT has been given a Value grade of D.
III sticks out from IT in both our Zacks Rank and Style Scores models, so value investors will likely feel that III is the better option right now.
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Information Services Group, Inc. (III) : Free Stock Analysis Report
Gartner, Inc. (IT) : Free Stock Analysis Report
