Investors looking for stocks in the Internet - Software sector might want to consider either j2 Global (JCOM - Free Report) or Apptio . But which of these two stocks presents investors with the better value opportunity right now? 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Currently, j2 Global has a Zacks Rank of #1 (Strong Buy), while Apptio has a Zacks Rank of #2 (Buy). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that JCOM 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.
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.
JCOM currently has a forward P/E ratio of 12.99, while APTI has a forward P/E of 750. We also note that JCOM has a PEG ratio of 1.62. 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. APTI currently has a PEG ratio of 60.
Another notable valuation metric for JCOM is its P/B ratio of 3.86. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, APTI has a P/B of 11.51.
These are just a few of the metrics contributing to JCOM's Value grade of B and APTI's Value grade of F.
JCOM is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that JCOM is likely the superior value option right now.