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Are These Retail-Wholesale Stocks Undervalued Right Now?
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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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company to watch right now is Nordstrom (JWN - Free Report) . JWN is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value.
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. JWN has a P/S ratio of 0.26. This compares to its industry's average P/S of 0.53.
Finally, we should also recognize that JWN has a P/CF ratio of 5.11. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. JWN's current P/CF looks attractive when compared to its industry's average P/CF of 11.65. Over the past year, JWN's P/CF has been as high as 25.41 and as low as 3.89, with a median of 6.12.
If you're looking for another solid Retail - Apparel and Shoes value stock, take a look at Tapestry (TPR - Free Report) . TPR is a # 2 (Buy) stock with a Value score of A.
Tapestry is trading at a forward earnings multiple of 10.12 at the moment, with a PEG ratio of 0.82. This compares to its industry's average P/E of 11.32 and average PEG ratio of 0.51.
TPR's Forward P/E has been as high as 17.24 and as low as 9.81, with a median of 12.58. During the same time period, its PEG ratio has been as high as 1.72, as low as 0.80, with a median of 1.20.
Additionally, Tapestry has a P/B ratio of 3.59 while its industry's price-to-book ratio sits at 3.35. For TPR, this valuation metric has been as high as 4.54, as low as 3.23, with a median of 3.67 over the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Nordstrom and Tapestry are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, JWN and TPR feels like a great value stock at the moment.
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Are These Retail-Wholesale Stocks Undervalued Right Now?
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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company to watch right now is Nordstrom (JWN - Free Report) . JWN is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value.
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. JWN has a P/S ratio of 0.26. This compares to its industry's average P/S of 0.53.
Finally, we should also recognize that JWN has a P/CF ratio of 5.11. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. JWN's current P/CF looks attractive when compared to its industry's average P/CF of 11.65. Over the past year, JWN's P/CF has been as high as 25.41 and as low as 3.89, with a median of 6.12.
If you're looking for another solid Retail - Apparel and Shoes value stock, take a look at Tapestry (TPR - Free Report) . TPR is a # 2 (Buy) stock with a Value score of A.
Tapestry is trading at a forward earnings multiple of 10.12 at the moment, with a PEG ratio of 0.82. This compares to its industry's average P/E of 11.32 and average PEG ratio of 0.51.
TPR's Forward P/E has been as high as 17.24 and as low as 9.81, with a median of 12.58. During the same time period, its PEG ratio has been as high as 1.72, as low as 0.80, with a median of 1.20.
Additionally, Tapestry has a P/B ratio of 3.59 while its industry's price-to-book ratio sits at 3.35. For TPR, this valuation metric has been as high as 4.54, as low as 3.23, with a median of 3.67 over the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Nordstrom and Tapestry are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, JWN and TPR feels like a great value stock at the moment.