Are Investors Undervaluing Rocky Brands (RCKY) Right Now?
The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. 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 stock to keep an eye on is Rocky Brands (RCKY). RCKY is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 11.95 right now. For comparison, its industry sports an average P/E of 27.10. Over the past 52 weeks, RCKY's Forward P/E has been as high as 12.45 and as low as 5.56, with a median of 7.59.
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. RCKY has a P/S ratio of 0.45. This compares to its industry's average P/S of 0.91.
Finally, our model also underscores that RCKY has a P/CF ratio of 9.67. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. RCKY's P/CF compares to its industry's average P/CF of 26.19. RCKY's P/CF has been as high as 10.05 and as low as 3.96, with a median of 6, all within the past year.
Another great Shoes and Retail Apparel stock you could consider is Skechers (SKX), which is a # 2 (Buy) stock with a Value Score of A.
Skechers is currently trading with a Forward P/E ratio of 15.81 while its PEG ratio sits at 0.58. Both of the company's metrics compare favorably to its industry's average P/E of 27.10 and average PEG ratio of 1.55.
SKX's Forward P/E has been as high as 19.13 and as low as 11.91, with a median of 14.74. During the same time period, its PEG ratio has been as high as 0.58, as low as 0.43, with a median of 0.47.
Skechers sports a P/B ratio of 2.24 as well; this compares to its industry's price-to-book ratio of 9.93. In the past 52 weeks, SKX's P/B has been as high as 2.24, as low as 1.65, with a median of 1.86.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Rocky Brands and Skechers are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, RCKY and SKX feels like a great value stock at the moment.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Rocky Brands, Inc. (RCKY) : Free Stock Analysis Report
Skechers U.S.A., Inc. (SKX) : Free Stock Analysis Report
