Are Investors Undervaluing Guess (GES) Right Now?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One company to watch right now is Guess (GES). GES is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock has a Forward P/E ratio of 6.83. This compares to its industry's average Forward P/E of 11.23. Over the past 52 weeks, GES's Forward P/E has been as high as 10.08 and as low as 5.37, with a median of 6.74.
Another valuation metric that we should highlight is GES's P/B ratio of 2.15. The P/B ratio pits a stock's market value against 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 6.28. Over the past 12 months, GES's P/B has been as high as 2.74 and as low as 1.71, with a median of 2.14.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. GES has a P/S ratio of 0.43. This compares to its industry's average P/S of 0.5.
Finally, investors should note that GES has a P/CF ratio of 7.16. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 19.82. Within the past 12 months, GES's P/CF has been as high as 8.28 and as low as 4.89, with a median of 6.91.
Investors could also keep in mind PVH (PVH), an Textile - Apparel stock with a Zacks Rank of # 2 (Buy) and Value grade of A.
Shares of PVH are currently trading at a forward earnings multiple of 6.69 and a PEG ratio of 0.50 compared to its industry's P/E and PEG ratios of 11.23 and 1.11, respectively.
PVH's price-to-earnings ratio has been as high as 11.27 and as low as 5.93, with a median of 8.11, while its PEG ratio has been as high as 1.10 and as low as 0.47, with a median of 0.56, all within the past year.
PVH also has a P/B ratio of 0.89 compared to its industry's price-to-book ratio of 6.28. Over the past year, its P/B ratio has been as high as 1.22, as low as 0.65, with a median of 1.01.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Guess and PVH are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, GES and PVH feels like a great value stock at the moment.
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Guess?, Inc. (GES) : Free Stock Analysis Report
PVH Corp. (PVH) : Free Stock Analysis Report
