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FMS or SMLR: Which Is the Better Value Stock Right Now?

Zacks Equity Research
·2-min read

Investors interested in Medical - Instruments stocks are likely familiar with Fresenius (FMS) and Semler Scientific Inc. (SMLR). But which of these two stocks presents investors with the better value opportunity right now? Let's 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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Fresenius has a Zacks Rank of #2 (Buy), while Semler Scientific Inc. 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 FMS has an improving earnings outlook. But this is just one factor that value investors are interested in.

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

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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.

FMS currently has a forward P/E ratio of 15.53, while SMLR has a forward P/E of 52.99. We also note that FMS has a PEG ratio of 2.02. 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. SMLR currently has a PEG ratio of 2.12.

Another notable valuation metric for FMS is its P/B ratio of 1.69. 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, SMLR has a P/B of 19.11.

These are just a few of the metrics contributing to FMS's Value grade of A and SMLR's Value grade of C.

FMS has seen stronger estimate revision activity and sports more attractive valuation metrics than SMLR, so it seems like value investors will conclude that FMS is the superior option right now.


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Fresenius Medical Care AG Co. KGaA (FMS) : Free Stock Analysis Report
 
Semler Scientific Inc. (SMLR) : Free Stock Analysis Report
 
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Zacks Investment Research