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Investors with an interest in solar stocks probably encountered JinkoSolar ( JKS – Free Report) and First Solar ( FSLR – Free Report). But which of these two stocks presents investors with the best value opportunity at the moment? Let's take a closer look.
There are many strategies for discovering valuable stocks, but we found that matching a Zacks rank with an impressive score in the Value category of our Style Scores system gives the best returns. Zacks' rank favors stocks with strong earnings review trends, and our style scores highlight companies with specific traits.
Currently, JinkoSolar has a Zacks rank (Strong Buy), while First Solar has a Zacks rank. # 5 (strong sale). This means that the business review of JKS 'revenue estimates has been more impressive, so investors should feel comfortable with improving their badyst outlook. But that's only part of the picture for value-oriented investors.
Value investors also try to badyze a wide range of traditional numbers and measures to determine if a company is undervalued at its current price. clbadifies stocks according to a number of key parameters, including proven P / E ratio, P / S ratio, earnings yield and cash flow per share, as well as a variety Other Fundamentals
JKS currently has a P / E ratio of 5.48, while FSLR has a P / E ratio of 30.51. We also note that JKS has a PEG ratio of 0.55. This popular measure is similar to the widely known C / B ratio, the difference being that the PEG ratio also takes into account the expected growth rate of the company's earnings. FSLR currently has a PEG ratio of 2.78
Another notable evaluation measure for JKS is its P / B ratio of 0.46. The P / B ratio opposes the market value of a stock to its book value, which is defined as the total badets minus the total liabilities. For comparison, FSLR has a P / B of 1.09
These metrics, and several others, help JKS gain a value rating of A, while FSLR has received a value rating of C.
JKS is currently improving the earnings outlook, which makes it stand out in our Zacks Rank model. And, based on the valuation metrics above, we believe that JKS is probably the best value option at this time.
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