Investors looking for stocks in the Automotive - Original Equipment sector might want to consider either Allison Transmission (ALSN) or Ferrari (RACE). 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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Right now, Allison Transmission is sporting a Zacks Rank of #2 (Buy), while Ferrari has a Zacks Rank of #3 (Hold). This means that ALSN's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.

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.

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.

ALSN currently has a forward P/E ratio of 12.42, while RACE has a forward P/E of 49.60. We also note that ALSN has a PEG ratio of 1.81. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. RACE currently has a PEG ratio of 3.99.

Another notable valuation metric for ALSN is its P/B ratio of 6.12. 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, RACE has a P/B of 30.44.

These are just a few of the metrics contributing to ALSN's Value grade of A and RACE's Value grade of D.

ALSN sticks out from RACE in both our Zacks Rank and Style Scores models, so value investors will likely feel that ALSN is the better option right now.

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Allison Transmission Holdings, Inc. (ALSN) : Free Stock Analysis Report

Ferrari N.V. (RACE) : Free Stock Analysis Report

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