Zacks Equity Research
·2 min read
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.
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.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One company value investors might notice is J.Jill (JILL). JILL is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 7.88, while its industry has an average P/E of 12.49. Over the past 52 weeks, JILL's Forward P/E has been as high as 10.53 and as low as 5.57, with a median of 7.07.
Finally, our model also underscores that JILL has a P/CF ratio of 4.23. 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. This stock's P/CF looks attractive against its industry's average P/CF of 6.84. Within the past 12 months, JILL's P/CF has been as high as 41.22 and as low as -28.74, with a median of 4.60.
If you're looking for another solid Retail - Apparel and Shoes value stock, take a look at Shoe Carnival (SCVL). SCVL is a # 2 (Buy) stock with a Value score of A.
Furthermore, Shoe Carnival holds a P/B ratio of 1.34 and its industry's price-to-book ratio is 2.96. SCVL's P/B has been as high as 2.64, as low as 1.14, with a median of 1.60 over the past 12 months.
These are only a few of the key metrics included in J.Jill and Shoe Carnival strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, JILL and SCVL look like an impressive 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
J.Jill, Inc. (JILL) : Free Stock Analysis Report
Shoe Carnival, Inc. (SCVL) : Free Stock Analysis Report
As an investment expert deeply entrenched in the world of financial analysis, I bring a wealth of knowledge and practical experience to the table. My background is rooted in understanding market trends, assessing the value of stocks, and deciphering intricate financial metrics. This expertise is not just theoretical but is grounded in real-world application and a comprehensive understanding of the nuances of the financial landscape.
Now, delving into the content from Zacks Equity Research, the article revolves around the Zacks Rank and the application of the Style Scores system to identify promising investment opportunities. Here are key concepts covered in the article:
-
Zacks Rank:
- The Zacks Rank is a proprietary quantitative model that ranks stocks based on their potential for outperformance. It places a strong emphasis on earnings estimates and estimate revisions.
-
Value Investing:
- Value investing is highlighted as a popular stock market trend. It is a strategy that focuses on identifying undervalued stocks using traditional forms of analysis on key valuation metrics. This strategy aims to find stocks with potential for future profits.
-
Style Scores System:
- Zacks has developed the Style Scores system, which assigns grades to stocks based on specific traits. In this context, the article mentions the "Value" category, indicating that value investors would be interested in stocks with high grades in this category.
-
P/E Ratio (Price-to-Earnings Ratio):
- The Price-to-Earnings ratio is a key valuation metric discussed in the article. It is calculated by dividing the current stock price by the earnings per share (EPS). J.Jill (JILL) is noted to have a P/E ratio of 7.88.
-
Forward P/E Ratio:
- The Forward P/E ratio considers future earnings estimates. JILL's Forward P/E over the past 52 weeks has ranged from 5.57 to 10.53, with a median of 7.07.
-
P/CF Ratio (Price-to-Cash Flow Ratio):
- The Price-to-Cash Flow ratio focuses on a firm's operating cash flow. JILL is highlighted to have a P/CF ratio of 4.23, which is compared to the industry average P/CF of 6.84.
-
P/B Ratio (Price-to-Book Ratio):
- The Price-to-Book ratio is mentioned in relation to Shoe Carnival (SCVL). SCVL's P/B ratio is given as 1.34, compared to the industry's P/B ratio of 2.96.
These metrics provide a comprehensive view of the financial health and valuation of the mentioned companies, J.Jill (JILL) and Shoe Carnival (SCVL), and are essential tools for investors looking to make informed decisions based on value investing principles.
