Which stock currently offers the better value?

Investors looking for stocks in the medical, biomedical and genetics space should consider either Genmab A/S Sponsored ADR (GMAB) or Techne (TECH). 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 proven Zacks Rank places an emphasis on earnings estimates and estimate revisions, while our Style Scores aim to identify stocks with specific traits.

Currently, Genmab A/S Sponsored ADR has a Zacks Rank of #2 (Buy), while Techne has a Zacks Rank of #3 (Hold). This means that GMAB’s earnings estimate revisions have been more impressive, so investors should feel comfortable with the improved analyst forecast. However, value investors will be interested in much more than just this.

Value investors also tend to use a set of traditional, tried-and-tested numbers to find stocks that they believe are undervalued at their current price levels.

Our Value category highlights undervalued companies by looking at a number of key metrics, including the popular P/E ratio, as well as P/S, earnings yield, cash flow per share, and a number of other fundamental metrics that value investors have used for years.

GMAB currently has a forward P/E ratio of 22.98, while TECH has a forward P/E ratio of 34.77. We also note that GMAB has a PEG ratio of 0.93. 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. TECH currently has a PEG ratio of 6.52.

Another important valuation metric for GMAB is its P/B ratio of 3.56. The P/B ratio compares a stock’s market value to its book value, which is defined as total assets minus total liabilities. For comparison, TECH has a P/B ratio of 5.58.

These are just some of the metrics that contribute to the B score for GMAB and the D score for TECH.

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

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Genmab A/S Sponsored ADR (GMAB): Free Stock Analysis Report

Bio-Techne Corp (TECH): Free Stock Analysis Report

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