Back to top

Image: Bigstock

Are Investors Undervaluing These Consumer Discretionary Stocks Right Now?

Read MoreHide Full Article

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

Delta Apparel is a stock many investors are watching right now. DLA is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 8.62. This compares to its industry's average Forward P/E of 13.93. Over the past year, DLA's Forward P/E has been as high as 15.86 and as low as 8.22, with a median of 10.22.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. DLA has a P/S ratio of 0.46. This compares to its industry's average P/S of 0.79.

Finally, we should also recognize that DLA has a P/CF ratio of 5.84. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. DLA's current P/CF looks attractive when compared to its industry's average P/CF of 21.31. Over the past year, DLA's P/CF has been as high as 75.67 and as low as 5.09, with a median of 6.65.

Investors could also keep in mind Jerash Holdings (JRSH - Free Report) , an Textile - Apparel stock with a Zacks Rank of # 2 (Buy) and Value grade of A.

Furthermore, Jerash Holdings holds a P/B ratio of 1.30 and its industry's price-to-book ratio is 7.41. JRSH's P/B has been as high as 1.59, as low as 1.06, with a median of 1.28 over the past 12 months.

These are only a few of the key metrics included in Delta Apparel and Jerash Holdings strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, DLA and JRSH look like an impressive value stock at the moment.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Jerash Holdings (US), Inc. (JRSH) - free report >>

Published in