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FL or PLCE: Which Is the Better Value Stock Right Now?

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Investors interested in stocks from the Retail - Apparel and Shoes sector have probably already heard of Foot Locker (FL - Free Report) and The Children's Place (PLCE - Free Report) . 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Right now, both Foot Locker and The Children's Place are sporting a Zacks Rank of # 2 (Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. But this is only part of the picture for value investors.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

FL currently has a forward P/E ratio of 6.83, while PLCE has a forward P/E of 7.45. We also note that FL has a PEG ratio of 0.23. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. PLCE currently has a PEG ratio of 0.93.

Another notable valuation metric for FL is its P/B ratio of 1.47. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, PLCE has a P/B of 7.21.

These are just a few of the metrics contributing to FL's Value grade of A and PLCE's Value grade of C.

Both FL and PLCE are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that FL is the superior value option right now.


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