Which stocks should value investors buy now?

Investors interested in furniture stocks are probably familiar with American Woodmark (AMWD) and WillScot (WSC). But which of these two stocks currently offers investors the better opportunity for value appreciation? Let’s take a closer look.

There are many strategies for discovering value stocks, but we have found that combining a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Currently, American Woodmark has a Zacks Rank of #2 (Buy), while WillScot has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive earnings estimate revisions, so investors can be confident that AMWD has an improving earnings outlook. But that’s just one of the factors of interest to value investors.

Value investors analyze a variety of traditional and proven metrics to find companies that they believe are undervalued at their current share price levels.

Our Value category evaluates stocks using a number of key metrics, including the tried-and-true P/E, P/S, earnings yield and cash flow per share, as well as a number of other fundamental metrics commonly used by value investors.

AMWD currently has a forward P/E ratio of 14.29, while WSC has a forward P/E ratio of 63.78. We also note that AMWD has a PEG ratio of 1.59. 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. WSC currently has a PEG ratio of 4.25.

Another important valuation metric for AMWD is its P/B ratio of 2.69. 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. For comparison, WSC has a P/B ratio of 2.94.

Based on these and many other metrics, AMWD receives a grade of A, while WSC receives a grade of D.

AMWD has seen stronger estimate revision activity and the company has more attractive valuation multiples than WSC, so value investors seem to be concluding that AMWD is the better option at present.

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American Woodmark Corporation (AMWD): Free Stock Analysis Report

WillScot Corporation (WSC): Free Stock Analysis Report

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