Yahoo Finance LGND or ILMN: Which Is the Better Value Stock Right Now?
Investors with an interest in Medical - Biomedical and Genetics stocks have likely encountered both Ligand Pharmaceuticals (LGND) and Illumina (ILMN). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. 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, Ligand Pharmaceuticals is sporting a Zacks Rank of #1 (Strong Buy), while Illumina has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that LGND is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle for value investors.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its 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.
LGND currently has a forward P/E ratio of 13.52, while ILMN has a forward P/E of 150.13. We also note that LGND has a PEG ratio of 0.68. 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. ILMN currently has a PEG ratio of 6.76.
Another notable valuation metric for LGND is its P/B ratio of 1.89. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, ILMN has a P/B of 4.97.
Based on these metrics and many more, LGND holds a Value grade of B, while ILMN has a Value grade of D.
LGND sticks out from ILMN in both our Zacks Rank and Style Scores models, so value investors will likely feel that LGND is the better 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
Ligand Pharmaceuticals Incorporated (LGND) : Free Stock Analysis Report
Illumina, Inc. (ILMN) : Free Stock Analysis Report
