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GTN or GAIA: Which Is the Better Value Stock Right Now?
Investors looking for stocks in the Broadcast Radio and Television sector might want to consider either Gray Television (GTN - Free Report) or Gaiam (GAIA - 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.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Currently, Gray Television has a Zacks Rank of #2 (Buy), while Gaiam has a Zacks Rank of #3 (Hold). This means that GTN's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. 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.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
GTN currently has a forward P/E ratio of 13.42, while GAIA has a forward P/E of 92.83. We also note that GTN has a PEG ratio of 1.34. 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. GAIA currently has a PEG ratio of 5.30.
Another notable valuation metric for GTN is its P/B ratio of 1.20. 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, GAIA has a P/B of 2.84.
Based on these metrics and many more, GTN holds a Value grade of A, while GAIA has a Value grade of C.
GTN sticks out from GAIA in both our Zacks Rank and Style Scores models, so value investors will likely feel that GTN is the better option right now.