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, value investing is easily one of the most popular ways to find great stocks in any market environment. 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 stock to keep an eye on is Shoe Carnival (SCVL). SCVL is currently sporting a Zacks Rank #2 (Buy) and an A for Value. The stock holds a P/E ratio of 13.37, while its industry has an average P/E of 14.28. Over the past 52 weeks, SCVL's Forward P/E has been as high as 16.40 and as low as 7.18, with a median of 11.63.
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 preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. SCVL has a P/S ratio of 0.37. This compares to its industry's average P/S of 0.41.
Finally, investors will want to recognize that SCVL has a P/CF ratio of 6.48. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 14.28. SCVL's P/CF has been as high as 11.74 and as low as 4.41, with a median of 6.18, all within the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Shoe Carnival is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, SCVL feels like a great value stock at the moment.
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Shoe Carnival, Inc. (SCVL): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).