Investors who are interested in stocks of the Internet – Content industry will have likely heard of RELX (RELX) and Perion Network. Which stock is more appealing to value investors? We will need to have a closer look to determine.
Combining a strong Zacks Rank and a highly rated grade in the Value section of our Style Scores program is the best way to identify great value stocks. The Zacks Rank is a reliable indicator of companies that are able to revise their estimates in a positive trend. Our Style Scores indicate stocks with particular traits.
RELX PLC and Perion Network have Zacks ranks of #1 (Strong Buy), and #3 (Hold) respectively. Investors should be reassured that PERI has likely seen a stronger improvement in its earnings outlook than RELX recently. This is just one aspect of the picture for value-investors.
Value investors look at a range of traditional metrics and figures to determine whether a company is undervalued at current share prices.
The Style Scores System’s Value category looks at several key metrics to identify undervalued companies. These include the P/E ratio, long-favored P/S ratio and earnings yield. We also consider cash flow per share and other fundamentals to determine a company’s fair value.
PERI currently has a forward ratio of 11.59 to RELX’s forward P/E. We also noticed that PERI’s PEG ratio is 0.46. This metric is similar to the P/E ratio. However the PEG ratio also accounts for the stock’s expected earnings increase rate. RELX currently has an PEG ratio 1.81.
Another important valuation metric of PERI is its P/B rate of 2.10. The P/B ratio is a way to compare a stock’s current market value and its book value. This is the sum of total assets less total liabilities. RELX, however, has a P/B value of 11.91.
These metrics and many other factors give PERI a value score of B. RELX is a value rating of C.
PERI has had a stronger estimate revision activity than RELX and boasts more attractive valuation metrics, so value investors may conclude that PERI will be the better option.
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