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Are These Consumer Discretionary Stocks a Great Value Stocks Right Now?

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...

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This story originally appeared on Zacks

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.

- Zacks

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One company to watch right now is Central Garden & Pet (CENTA). CENTA is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 15.10, which compares to its industry's average of 18.51. CENTA's Forward P/E has been as high as 22.20 and as low as 13.22, with a median of 16.96, all within the past year.

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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. CENTA has a P/S ratio of 0.8. This compares to its industry's average P/S of 1.06.

Investors could also keep in mind The Container Store (TCS), an Consumer Products - Discretionary stock with a Zacks Rank of # 2 (Buy) and Value grade of A.

The Container Store also has a P/B ratio of 1.30 compared to its industry's price-to-book ratio of 7.99. Over the past year, its P/B ratio has been as high as 3, as low as 1.22, with a median of 1.75.

Value investors will likely look at more than just these metrics, but the above data helps show that Central Garden & Pet and The Container Store are likely undervalued currently. And when considering the strength of its earnings outlook, CENTA and TCS sticks out as one of the market's strongest value stocks.



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Central Garden & Pet Company (CENTA): Free Stock Analysis Report

 

Container Store The (TCS): Free Stock Analysis Report

 

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Zacks Investment Research