GPX vs. STRA: Which Stock Should Value Investors Buy Now?

STRA

Investors looking for stocks in the Schools sector might want to consider either GP Strategies or Strategic Education (STRA - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

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, GP Strategies has a Zacks Rank of #2 (Buy), while Strategic Education has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that GPX has an improving earnings outlook. However, value investors will care about much more than just this.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies 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.

GPX currently has a forward P/E ratio of 12.38, while STRA has a forward P/E of 22.37. We also note that GPX has a PEG ratio of 0.83. 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. STRA currently has a PEG ratio of 1.49.

Another notable valuation metric for GPX is its P/B ratio of 1.23. 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, STRA has a P/B of 2.51.

Based on these metrics and many more, GPX holds a Value grade of A, while STRA has a Value grade of D.

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

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