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TSQ vs. SKYAY: Which Stock Is the Better Value Option?

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Investors interested in Broadcast Radio and Television stocks are likely familiar with Townsquare Media (TSQ - Free Report) and British Sky Broadcasting Group PLC . But which of these two companies is the best option for those looking for undervalued stocks? Let's 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Townsquare Media and British Sky Broadcasting Group PLC are sporting Zacks Ranks of #1 (Strong Buy) and #5 (Strong Sell), respectively, right now. This means that TSQ's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture 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.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

TSQ currently has a forward P/E ratio of 7.90, while SKYAY has a forward P/E of 25.74. We also note that TSQ has a PEG ratio of 1.76. 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. SKYAY currently has a PEG ratio of 1.98.

Another notable valuation metric for TSQ is its P/B ratio of 0.36. 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, SKYAY has a P/B of 7.18.

These metrics, and several others, help TSQ earn a Value grade of A, while SKYAY has been given a Value grade of D.

TSQ sticks out from SKYAY in both our Zacks Rank and Style Scores models, so value investors will likely feel that TSQ is the better option right now.


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