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LL vs. FAST: Which Stock Should Value Investors Buy Now?

Investors with an interest in Building Products - Retail stocks have likely encountered both Lumber Liquidators Holdings (LL) and Fastenal (FAST). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Lumber Liquidators Holdings has a Zacks Rank of #2 (Buy), while Fastenal has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that LL likely has seen a stronger improvement to its earnings outlook than FAST has recently. But this is just one piece of the puzzle for value investors.

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.

Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

LL currently has a forward P/E ratio of 24.72, while FAST has a forward P/E of 29.89. We also note that LL has a PEG ratio of 0.90. 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. FAST currently has a PEG ratio of 3.32.

Another notable valuation metric for LL is its P/B ratio of 4.22. 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, FAST has a P/B of 9.80.

These metrics, and several others, help LL earn a Value grade of A, while FAST has been given a Value grade of D.

LL stands above FAST thanks to its solid earnings outlook, and based on these valuation figures, we also feel that LL is the superior value option right now.


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Lumber Liquidators Holdings, Inc (LL): Free Stock Analysis Report
 
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