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Are These Retail-Wholesale Stocks Undervalued Right Now?

Zacks Equity Research
·2-min read

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.

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.

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 Citi Trends (CTRN). CTRN is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 8.81 right now. For comparison, its industry sports an average P/E of 13.55. CTRN's Forward P/E has been as high as 35.21 and as low as 8.81, with a median of 15.55, all within the past year.

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Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. CTRN has a P/S ratio of 0.58. This compares to its industry's average P/S of 0.59.

Investors could also keep in mind SuperGroup (SEPGY), an Retail - Apparel and Shoes stock with a Zacks Rank of # 2 (Buy) and Value grade of A.

SuperGroup also has a P/B ratio of 2.15 compared to its industry's price-to-book ratio of 4.72. Over the past year, its P/B ratio has been as high as 4.63, as low as 1.74, with a median of 2.47.

Value investors will likely look at more than just these metrics, but the above data helps show that Citi Trends and SuperGroup are likely undervalued currently. And when considering the strength of its earnings outlook, CTRN and SEPGY sticks out as one of the market's strongest value stocks.


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Citi Trends, Inc. (CTRN) : Free Stock Analysis Report
 
SuperGroup PLC Unsponsored ADR (SEPGY) : Free Stock Analysis Report
 
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