Investors interested in Textile - Apparel stocks are likely familiar with G-III Apparel Group (GIII) and Gildan Activewear (GIL). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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, G-III Apparel Group has a Zacks Rank of #1 (Strong Buy), while Gildan Activewear has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that GIII is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
GIII currently has a forward P/E ratio of 12.85, while GIL has a forward P/E of 19.11. We also note that GIII has a PEG ratio of 0.86. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. GIL currently has a PEG ratio of 1.65.
Another notable valuation metric for GIII is its P/B ratio of 1.76. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, GIL has a P/B of 4.11.
These are just a few of the metrics contributing to GIII's Value grade of A and GIL's Value grade of C.
GIII has seen stronger estimate revision activity and sports more attractive valuation metrics than GIL, so it seems like value investors will conclude that GIII is the superior option right now.
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G-III Apparel Group, LTD. (GIII) : Free Stock Analysis Report
Gildan Activewear, Inc. (GIL) : Free Stock Analysis Report
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