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Is Hanesbrands (HBI) a Great Value Stock Right Now?
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore 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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 Hanesbrands (HBI - Free Report) . HBI is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 7.85 right now. For comparison, its industry sports an average P/E of 12.36. Over the past year, HBI's Forward P/E has been as high as 8.81 and as low as 5.10, with a median of 6.90.
Investors will also notice that HBI has a PEG ratio of 1.07. 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. HBI's PEG compares to its industry's average PEG of 1.65.
We should also highlight that HBI has a P/B ratio of 4.07. 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. HBI's current P/B looks attractive when compared to its industry's average P/B of 7.05. Within the past 52 weeks, HBI's P/B has been as high as 8.10 and as low as 3.02, with a median of 5.02.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. HBI has a P/S ratio of 0.44. This compares to its industry's average P/S of 0.72.
Finally, investors will want to recognize that HBI has a P/CF ratio of 5.96. 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. HBI's P/CF compares to its industry's average P/CF of 20.83. HBI's P/CF has been as high as 28.19 and as low as 4.41, with a median of 6.72, all within the past year.
Investors could also keep in mind PVH (PVH - Free Report) , an Textile - Apparel stock with a Zacks Rank of # 2 (Buy) and Value grade of A.
PVH is trading at a forward earnings multiple of 10.18 at the moment, with a PEG ratio of 1. This compares to its industry's average P/E of 12.36 and average PEG ratio of 1.65.