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Are Investors Undervaluing Chico's FAS (CHS) Right Now?
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, 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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One company value investors might notice is Chico's FAS (CHS - Free Report) . CHS is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock holds a P/E ratio of 5.95, while its industry has an average P/E of 10.25. Over the past year, CHS's Forward P/E has been as high as 18.56 and as low as 4.98, with a median of 9.82.
Investors should also recognize that CHS has a P/B ratio of 2.31. 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. This stock's P/B looks attractive against its industry's average P/B of 2.48. Over the past year, CHS's P/B has been as high as 4.22 and as low as 1.92, with a median of 2.63.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. CHS has a P/S ratio of 0.34. This compares to its industry's average P/S of 0.38.
Finally, our model also underscores that CHS has a P/CF ratio of 4.45. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. CHS's current P/CF looks attractive when compared to its industry's average P/CF of 5.71. Within the past 12 months, CHS's P/CF has been as high as 72.75 and as low as -11.37, with a median of 5.34.
Another great Retail - Apparel and Shoes stock you could consider is Tapestry (TPR - Free Report) , which is a # 1 (Strong Buy) stock with a Value Score of A.
Shares of Tapestry currently holds a Forward P/E ratio of 7.82, and its PEG ratio is 0.63. In comparison, its industry sports average P/E and PEG ratios of 10.25 and 0.67.