Should Value Investors Buy Ethan Allen Interiors Inc. (ETD) Stock?

LOVE ETD

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find 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 use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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 Ethan Allen Interiors Inc. (ETD - Free Report) . ETD is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 9.08. This compares to its industry's average Forward P/E of 10.40. Over the last 12 months, ETD's Forward P/E has been as high as 9.27 and as low as 6.57, with a median of 8.45.

Finally, investors will want to recognize that ETD has a P/CF ratio of 5.57. 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 stock's P/CF looks attractive against its industry's average P/CF of 9.28. Over the past year, ETD's P/CF has been as high as 6.01 and as low as 4.20, with a median of 5.33.

Another great Retail - Home Furnishings stock you could consider is Lovesac (LOVE - Free Report) , which is a # 2 (Buy) stock with a Value Score of A.

Lovesac is trading at a forward earnings multiple of 12.27 at the moment, with a PEG ratio of 0.35. This compares to its industry's average P/E of 10.40 and average PEG ratio of 0.92.

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