Subscribe to Entrepreneur for $5
Subscribe

Are Investors Undervaluing These Consumer Discretionary 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...

By
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

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 use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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 Delta Apparel (DLA). DLA is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock is trading with P/E ratio of 9.16 right now. For comparison, its industry sports an average P/E of 20.14. Over the past 52 weeks, DLA's Forward P/E has been as high as 17.09 and as low as 8.22, with a median of 13.21.

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 prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. DLA has a P/S ratio of 0.5. This compares to its industry's average P/S of 0.86.

Hanesbrands (HBI) may be another strong Textile - Apparel stock to add to your shortlist. HBI is a # 2 (Buy) stock with a Value grade of A.

Shares of Hanesbrands currently holds a Forward P/E ratio of 8.73, and its PEG ratio is 1.07. In comparison, its industry sports average P/E and PEG ratios of 20.14 and 0.94.

HBI's Forward P/E has been as high as 13.35 and as low as 8.19, with a median of 10.77. During the same time period, its PEG ratio has been as high as 1.58, as low as 0.99, with a median of 1.30.

Hanesbrands sports a P/B ratio of 9.17 as well; this compares to its industry's price-to-book ratio of 9.22. In the past 52 weeks, HBI's P/B has been as high as 16.11, as low as 4.45, with a median of 10.03.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Delta Apparel and Hanesbrands are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, DLA and HBI feels like a great value stock at the moment.



Zacks’ Top Picks to Cash in on Artificial Intelligence

This world-changing technology is projected to generate $100s of billions by 2025. From self-driving cars to consumer data analysis, people are relying on machines more than we ever have before. Now is the time to capitalize on the 4th Industrial Revolution. Zacks’ urgent special report reveals 6 AI picks investors need to know about today.

See 6 Artificial Intelligence Stocks With Extreme Upside Potential>>

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

 

Delta Apparel, Inc. (DLA): Free Stock Analysis Report

 

Hanesbrands Inc. (HBI): Free Stock Analysis Report

 

To read this article on Zacks.com click here.