Advertisement
Singapore markets open in 4 hours 43 minutes

  • Straits Times Index

    3,293.13
    +20.41 (+0.62%)
     

  • S&P 500

    5,071.63
    +1.08 (+0.02%)
     

  • Dow

    38,460.92
    -42.77 (-0.11%)
     

  • Nasdaq

    15,712.75
    +16.11 (+0.10%)
     

  • Bitcoin USD

    63,925.74
    -2,339.00 (-3.53%)
     

  • CMC Crypto 200

    1,385.45
    -38.65 (-2.72%)
     

  • FTSE 100

    8,040.38
    -4.43 (-0.06%)
     

  • Gold

    2,331.60
    -10.50 (-0.45%)
     

  • Crude Oil

    82.88
    -0.48 (-0.58%)
     

  • 10-Yr Bond

    4.6520
    +0.0540 (+1.17%)
     

  • Nikkei

    38,460.08
    +907.92 (+2.42%)
     

  • Hang Seng

    17,201.27
    +372.34 (+2.21%)
     

  • FTSE Bursa Malaysia

    1,571.48
    +9.84 (+0.63%)
     

  • Jakarta Composite Index

    7,174.53
    -7,110.81 (-49.78%)
     

  • PSE Index

    6,572.75
    +65.95 (+1.01%)
     

SMGZY vs. SWCH: Which Stock Should Value Investors Buy Now?

Zacks Equity Research

Investors looking for stocks in the Technology Services sector might want to consider either Smiths Group PLC (SMGZY) or Switch (SWCH). 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Right now, Smiths Group PLC is sporting a Zacks Rank of #2 (Buy), while Switch has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that SMGZY 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.

ADVERTISEMENT

Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

SMGZY currently has a forward P/E ratio of 19.82, while SWCH has a forward P/E of 140.38. We also note that SMGZY has a PEG ratio of 3.03. 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. SWCH currently has a PEG ratio of 12.15.

Another notable valuation metric for SMGZY is its P/B ratio of 2.72. 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, SWCH has a P/B of 5.30.

These metrics, and several others, help SMGZY earn a Value grade of B, while SWCH has been given a Value grade of D.

SMGZY 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 SMGZY is likely the superior value option right now.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Smiths Group PLC (SMGZY) : Free Stock Analysis Report
 
Switch, Inc. (SWCH) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.