Investors interested in stocks from the Film and Television Production and Distribution sector have probably already heard of Cinemark Holdings (CNK – Free Report) and Live Nation (LYV – 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 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.
Cinemark Holdings has a Zacks Rank of #2 (Buy), while Live Nation has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that CNK likely has seen a stronger improvement to its earnings outlook than LYV has recently. 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.
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.
CNK currently has a forward P/E ratio of 14.95, while LYV has a forward P/E of 129.97. We also note that CNK has a PEG ratio of 1.50. 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. LYV currently has a PEG ratio of 3.68.
Another notable valuation metric for CNK is its P/B ratio of 6.62. 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, LYV has a P/B of 33.03.
Based on these metrics and many more, CNK holds a Value grade of A, while LYV has a Value grade of D.
CNK 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 CNK is likely the superior value option right now.
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