Investors with an interest in Retail - Apparel and Shoes stocks have likely encountered both Deckers (DECK) and Industria de Diseno Textil SA (IDEXY). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Deckers and Industria de Diseno Textil SA are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that DECK is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle 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 highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
DECK currently has a forward P/E ratio of 14.28, while IDEXY has a forward P/E of 24.17. We also note that DECK has a PEG ratio of 2.10. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. IDEXY currently has a PEG ratio of 3.13.
Another notable valuation metric for DECK is its P/B ratio of 6.05. 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, IDEXY has a P/B of 8.62.
These are just a few of the metrics contributing to DECK's Value grade of B and IDEXY's Value grade of D.
DECK has seen stronger estimate revision activity and sports more attractive valuation metrics than IDEXY, so it seems like value investors will conclude that DECK is the superior option right now.
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Deckers Outdoor Corporation (DECK) : Free Stock Analysis Report
Industria de Diseno Textil SA (IDEXY) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
