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Are Investors Undervaluing Fossil Group (FOSL) Right Now?

Zacks Equity Research

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.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One stock to keep an eye on is Fossil Group (FOSL). FOSL is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 7.44, which compares to its industry's average of 9.60. Over the past 52 weeks, FOSL's Forward P/E has been as high as 30.73 and as low as 5.86, with a median of 21.30.

Another notable valuation metric for FOSL is its P/B ratio of 1.11. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 2.68. FOSL's P/B has been as high as 2.34 and as low as 0.84, with a median of 1.29, over the past year.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. FOSL has a P/S ratio of 0.28. This compares to its industry's average P/S of 0.45.

Finally, investors should note that FOSL has a P/CF ratio of 5.95. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. FOSL's current P/CF looks attractive when compared to its industry's average P/CF of 5.96. FOSL's P/CF has been as high as 14.20 and as low as -18.65, with a median of 5.34, all within the past year.

These are just a handful of the figures considered in Fossil Group's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that FOSL is an impressive value stock right now.


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