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Should Value Investors Buy Salem Media Group (SALM) Stock?

Zacks Equity Research
·2 min read

While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One stock to keep an eye on is Salem Media Group (SALM). SALM is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 8.43 right now. For comparison, its industry sports an average P/E of 15.71. Over the past year, SALM's Forward P/E has been as high as 103 and as low as 3.32, with a median of 14.42.

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Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. SALM has a P/S ratio of 0.19. This compares to its industry's average P/S of 0.55.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Salem Media Group is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, SALM feels like a great value stock at the moment.


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Zacks Investment Research