Investors with an interest in Textile - Apparel stocks have likely encountered both Guess (GES) and Gildan Activewear (GIL). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Currently, Guess has a Zacks Rank of #2 (Buy), while Gildan Activewear has a Zacks Rank of #4 (Sell). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that GES is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
GES currently has a forward P/E ratio of 13.08, while GIL has a forward P/E of 16.43. We also note that GES has a PEG ratio of 0.75. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. GIL currently has a PEG ratio of 2.35.
Another notable valuation metric for GES is its P/B ratio of 2.24. 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. By comparison, GIL has a P/B of 2.82.
These metrics, and several others, help GES earn a Value grade of A, while GIL has been given a Value grade of C.
GES sticks out from GIL in both our Zacks Rank and Style Scores models, so value investors will likely feel that GES is the better option right now.
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Guess?, Inc. (GES) : Free Stock Analysis Report
Gildan Activewear, Inc. (GIL) : Free Stock Analysis Report
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