Subscribe to Entrepreneur for $5
Subscribe

AKA or BOOT: Which Is the Better Value Stock Right Now?

AKA vs. BOOT: Which Stock Is the Better Value Option?

By
This story originally appeared on Zacks

Investors interested in stocks from the Retail - Apparel and Shoes sector have probably already heard of a.k.a. Brands (AKA) and Boot Barn (BOOT). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

- Zacks

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Both a.k.a. Brands and Boot Barn have a Zacks Rank of # 2 (Buy) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. But this is only part of the picture for value investors.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.

Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

AKA currently has a forward P/E ratio of 18.82, while BOOT has a forward P/E of 21.98. We also note that AKA has a PEG ratio of 0.40. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. BOOT currently has a PEG ratio of 1.10.

Another notable valuation metric for AKA is its P/B ratio of 2.94. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, BOOT has a P/B of 7.54.

These are just a few of the metrics contributing to AKA's Value grade of B and BOOT's Value grade of C.

Both AKA and BOOT are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that AKA is the superior value option right now.



Infrastructure Stock Boom to Sweep America

A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.

The only question is “Will you get into the right stocks early when their growth potential is greatest?”

Zacks has released a Special Report to help you do just that, and today it’s free. Discover 5 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.

Download FREE: How to Profit from Trillions on Spending for Infrastructure >>

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

 

a.k.a. Brands Holding Corp. (AKA): Free Stock Analysis Report

 

Boot Barn Holdings, Inc. (BOOT): Free Stock Analysis Report

 

To read this article on Zacks.com click here.