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Are Investors Undervaluing Chico's FAS (CHS) Right Now?

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The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find 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.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One company value investors might notice is Chico's FAS . CHS is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 7.49 right now. For comparison, its industry sports an average P/E of 10.84. CHS's Forward P/E has been as high as 37.99 and as low as 6.56, with a median of 10.76, all within the past year.

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 prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. CHS has a P/S ratio of 0.33. This compares to its industry's average P/S of 0.43.

Finally, investors will want to recognize that CHS has a P/CF ratio of 5.02. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. CHS's current P/CF looks attractive when compared to its industry's average P/CF of 5.81. Over the past year, CHS's P/CF has been as high as 72.75 and as low as -12.07, with a median of 5.65.

Value investors will likely look at more than just these metrics, but the above data helps show that Chico's FAS is likely undervalued currently. And when considering the strength of its earnings outlook, CHS sticks out at as one of the market's strongest value stocks.

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