Investors with an interest in Automotive - Original Equipment stocks have likely encountered both Strattec Security (STRT) and Ferrari (RACE). But which of these two stocks presents investors with the better value opportunity right now? 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Strattec Security and Ferrari are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. 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 are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its 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.

STRT currently has a forward P/E ratio of 18.61, while RACE has a forward P/E of 55.76. We also note that STRT has a PEG ratio of 1.86. 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 5.12.

Another notable valuation metric for STRT is its P/B ratio of 0.66. 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 32.50.

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

STRT has seen stronger estimate revision activity and sports more attractive valuation metrics than RACE, so it seems like value investors will conclude that STRT is the superior option right now.

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Strattec Security Corporation (STRT) : Free Stock Analysis Report

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

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