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ASGN or FICO: Which Is the Better Value Stock Right Now?

Zacks

Investors interested in stocks from the Computers – IT Services sector have probably already heard of ASGN Inc (ASGN) and Fair Isaac (FICO). 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.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Both ASGN Inc and Fair Isaac have a Zacks Rank of # 2 (Buy) right now. Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. 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.


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.

ASGN currently has a forward P/E ratio of 20.86, while FICO has a forward P/E of 52.22. We also note that ASGN has a PEG ratio of 2.09. 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. FICO currently has a PEG ratio of 5.22.

Another notable valuation metric for ASGN is its P/B ratio of 4.23. 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, FICO has a P/B of 23.24.

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

Both ASGN and FICO are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that ASGN is the superior value option right now.


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