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Should Value Investors Buy Land's End (LE) Stock?

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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.

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 use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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.

Land's End (LE - Free Report) is a stock many investors are watching right now. LE is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 49.55. This compares to its industry's average Forward P/E of 49.70. Over the past year, LE's Forward P/E has been as high as 108.30 and as low as -67.60, with a median of 62.79.

Another notable valuation metric for LE is its P/B ratio of 2.27. 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 solid versus its industry's average P/B of 2.29. Over the past year, LE's P/B has been as high as 2.32 and as low as 0.54, with a median of 1.16.

Finally, investors will want to recognize that LE has a P/CF ratio of 44.49. 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. LE's current P/CF looks attractive when compared to its industry's average P/CF of 44.76. Within the past 12 months, LE's P/CF has been as high as 45.46 and as low as 8.39, with a median of 13.54.

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


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