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

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Investors with an interest in Schools stocks have likely encountered both GP Strategies and TAL Education (TAL - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Currently, GP Strategies has a Zacks Rank of #1 (Strong Buy), while TAL Education has a Zacks Rank of #4 (Sell). 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. 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.

GPX currently has a forward P/E ratio of 16.61, while TAL has a forward P/E of 100.84. We also note that GPX has a PEG ratio of 1.11. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. TAL currently has a PEG ratio of 3.04.

Another notable valuation metric for GPX is its P/B ratio of 1.22. 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, TAL has a P/B of 8.14.

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

GPX sticks out from TAL 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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