Investors interested in stocks from the Automotive - Original Equipment sector have probably already heard of Strattec Security (STRT) and Mobileye Global (MBLY). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Right now, Strattec Security is sporting a Zacks Rank of #1 (Strong Buy), while Mobileye Global has a Zacks Rank of #4 (Sell). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that STRT 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 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 highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

STRT currently has a forward P/E ratio of 13.55, while MBLY has a forward P/E of 55.16. We also note that STRT has a PEG ratio of 1.36. 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. MBLY currently has a PEG ratio of 2.16.

Another notable valuation metric for STRT is its P/B ratio of 0.91. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, MBLY has a P/B of 1.06.

Based on these metrics and many more, STRT holds a Value grade of A, while MBLY has a Value grade of F.

STRT is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that STRT is likely the superior value option right now.

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Strattec Security Corporation (STRT) : Free Stock Analysis Report

Mobileye Global Inc. (MBLY) : Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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