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Should Value Investors Buy Chico's FAS (CHS) Stock?
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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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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 company to watch right now is Chico's FAS . CHS is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 5.51 right now. For comparison, its industry sports an average P/E of 10.88. Over the past 52 weeks, CHS's Forward P/E has been as high as 18.56 and as low as 5.44, with a median of 10.49.
Investors should also recognize that CHS has a P/B ratio of 2.11. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 2.58. Within the past 52 weeks, CHS's P/B has been as high as 4.22 and as low as 1.95, with a median of 2.71.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. CHS has a P/S ratio of 0.3. This compares to its industry's average P/S of 0.42.
Finally, our model also underscores that CHS has a P/CF ratio of 4.08. 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. This stock's P/CF looks attractive against its industry's average P/CF of 5.67. Within the past 12 months, CHS's P/CF has been as high as 72.75 and as low as -11.37, with a median of 5.34.
Another great Retail - Apparel and Shoes stock you could consider is Designer Brands (DBI - Free Report) , which is a # 2 (Buy) stock with a Value Score of A.
Furthermore, Designer Brands holds a P/B ratio of 2.90 and its industry's price-to-book ratio is 2.58. DBI's P/B has been as high as 3.62, as low as 2.01, with a median of 2.60 over the past 12 months.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Chico's FAS and Designer Brands are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, CHS and DBI feels like a great value stock at the moment.
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Should Value Investors Buy Chico's FAS (CHS) Stock?
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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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 company to watch right now is Chico's FAS . CHS is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 5.51 right now. For comparison, its industry sports an average P/E of 10.88. Over the past 52 weeks, CHS's Forward P/E has been as high as 18.56 and as low as 5.44, with a median of 10.49.
Investors should also recognize that CHS has a P/B ratio of 2.11. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 2.58. Within the past 52 weeks, CHS's P/B has been as high as 4.22 and as low as 1.95, with a median of 2.71.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. CHS has a P/S ratio of 0.3. This compares to its industry's average P/S of 0.42.
Finally, our model also underscores that CHS has a P/CF ratio of 4.08. 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. This stock's P/CF looks attractive against its industry's average P/CF of 5.67. Within the past 12 months, CHS's P/CF has been as high as 72.75 and as low as -11.37, with a median of 5.34.
Another great Retail - Apparel and Shoes stock you could consider is Designer Brands (DBI - Free Report) , which is a # 2 (Buy) stock with a Value Score of A.
Furthermore, Designer Brands holds a P/B ratio of 2.90 and its industry's price-to-book ratio is 2.58. DBI's P/B has been as high as 3.62, as low as 2.01, with a median of 2.60 over the past 12 months.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Chico's FAS and Designer Brands are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, CHS and DBI feels like a great value stock at the moment.