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Should Value Investors Buy Nordstrom (JWN) Stock?

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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, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

Nordstrom (JWN - Free Report) is a stock many investors are watching right now. JWN is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 6.86, which compares to its industry's average of 8.82. Over the past year, JWN's Forward P/E has been as high as 29.41 and as low as 6.58, with a median of 13.29.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. JWN has a P/S ratio of 0.23. This compares to its industry's average P/S of 0.38.

Finally, investors will want to recognize that JWN has a P/CF ratio of 3.80. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 5.73. JWN's P/CF has been as high as 10.60 and as low as 3.28, with a median of 4.67, all within the past year.

Investors could also keep in mind Sportsman's Warehouse (SPWH - Free Report) , an Retail - Apparel and Shoes stock with a Zacks Rank of # 1 (Strong Buy) and Value grade of A.

Furthermore, Sportsman's Warehouse holds a P/B ratio of 1.26 and its industry's price-to-book ratio is 2.60. SPWH's P/B has been as high as 3.67, as low as 1.26, with a median of 2.98 over the past 12 months.

These are only a few of the key metrics included in Nordstrom and Sportsman's Warehouse strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, JWN and SPWH look like an impressive value stock at the moment.


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