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VSXY vs. IDEXY: Which Stock Is the Better Value Option?

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Investors with an interest in Retail - Apparel and Shoes stocks have likely encountered both Victoria's Secret (VSXY - Free Report) and Industria de Diseno Textil SA (IDEXY - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Currently, Victoria's Secret has a Zacks Rank of #1 (Strong Buy), while Industria de Diseno Textil SA has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that VSXY likely has seen a stronger improvement to its earnings outlook than IDEXY has recently. However, value investors will care about much more than just this.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when 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.

VSXY currently has a forward P/E ratio of 17.10, while IDEXY has a forward P/E of 25.51. We also note that VSXY has a PEG ratio of 0.62. 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. IDEXY currently has a PEG ratio of 3.30.

Another notable valuation metric for VSXY is its P/B ratio of 7.41. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, IDEXY has a P/B of 8.67.

Based on these metrics and many more, VSXY holds a Value grade of B, while IDEXY has a Value grade of D.

VSXY has seen stronger estimate revision activity and sports more attractive valuation metrics than IDEXY, so it seems like value investors will conclude that VSXY is the superior option right now.

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