Investors interested in stocks from the Internet - Content sector have probably already heard of Weibo Corporation (WB) and RELX PLC (RELX). 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.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Right now, both Weibo Corporation and RELX PLC are sporting a Zacks Rank of # 2 (Buy). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. 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.
WB currently has a forward P/E ratio of 7.82, while RELX has a forward P/E of 24.35. We also note that WB has a PEG ratio of 0.67. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. RELX currently has a PEG ratio of 2.47.
Another notable valuation metric for WB is its P/B ratio of 1.24. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, RELX has a P/B of 13.66.
These metrics, and several others, help WB earn a Value grade of A, while RELX has been given a Value grade of C.
Both WB and RELX are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that WB is the superior value option right now.
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