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IIJI or ETSY: Which Is the Better Value Stock Right Now?

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Investors looking for stocks in the Internet - Services sector might want to consider either Internet Initiative Japan or Etsy (ETSY - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Currently, both Internet Initiative Japan and Etsy are holding 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.

IIJI currently has a forward P/E ratio of 25.08, while ETSY has a forward P/E of 83.90. We also note that IIJI has a PEG ratio of 1.86. 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. ETSY currently has a PEG ratio of 6.71.

Another notable valuation metric for IIJI is its P/B ratio of 1.41. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, ETSY has a P/B of 13.16.

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

Both IIJI and ETSY are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that IIJI is the superior value option right now.


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