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WB vs. RELX: Which Stock Is the Better Value Option?
Investors interested in stocks from the Internet - Content sector have probably already heard of Weibo Corporation (WB - Free Report) and RELX PLC (RELX - 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.
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 is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Weibo Corporation has a Zacks Rank of #2 (Buy), while RELX PLC has a Zacks Rank of #5 (Strong Sell) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that WB is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
WB currently has a forward P/E ratio of 9.86, while RELX has a forward P/E of 22.60. We also note that WB has a PEG ratio of 0.85. 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. RELX currently has a PEG ratio of 2.15.
Another notable valuation metric for WB is its P/B ratio of 1.61. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, RELX has a P/B of 12.36.
These metrics, and several others, help WB earn a Value grade of B, while RELX has been given a Value grade of F.
WB has seen stronger estimate revision activity and sports more attractive valuation metrics than RELX, so it seems like value investors will conclude that WB is the superior option right now.