Back to top

Image: Bigstock

Are Investors Undervaluing Delta Apparel (DLA) Right Now?

Read MoreHide Full Article

While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

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 Delta Apparel (DLA - Free Report) . DLA is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock is trading with a P/E ratio of 15.13, which compares to its industry's average of 20.60. Over the past 52 weeks, DLA's Forward P/E has been as high as 328.50 and as low as 11.56, with a median of 15.99.

We also note that DLA holds a PEG ratio of 1.07. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. DLA's PEG compares to its industry's average PEG of 1.89. Over the last 12 months, DLA's PEG has been as high as 1.20 and as low as 0.98, with a median of 1.11.

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 prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. DLA has a P/S ratio of 0.39. This compares to its industry's average P/S of 0.79.

These are just a handful of the figures considered in Delta Apparel's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that DLA is an impressive value stock right now.


In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


Delta Apparel, Inc. (DLA) - free report >>

Published in