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IIJI vs. ETSY: Which Stock Should Value Investors Buy 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.

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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Both Internet Initiative Japan and Etsy have a Zacks Rank of # 2 (Buy) right now. Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. But this is just one piece of the puzzle for value investors.

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.

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

IIJI currently has a forward P/E ratio of 22.43, while ETSY has a forward P/E of 90.96. We also note that IIJI has a PEG ratio of 1.66. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. ETSY currently has a PEG ratio of 7.28.

Another notable valuation metric for IIJI is its P/B ratio of 1.32. 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, ETSY has a P/B of 12.95.

These metrics, and several others, help IIJI earn a Value grade of A, while ETSY has been given 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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