Investors looking for stocks in the Textile - Apparel sector might want to consider either G-III Apparel Group (GIII) or Gildan Activewear (GIL). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with 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. But this is just one factor that value investors are interested in.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
GIII currently has a forward P/E ratio of 9.70, while GIL has a forward P/E of 18.91. We also note that GIII has a PEG ratio of 0.65. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. GIL currently has a PEG ratio of 1.46.
Another notable valuation metric for GIII is its P/B ratio of 1.32. 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 4.05.
These metrics, and several others, help GIII earn a Value grade of A, while GIL has been given a Value grade of D.
GIII is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that GIII is likely the superior value 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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