Back to top

Image: Bigstock

VSXY or IDEXY: Which Is the Better Value Stock Right Now?

Read MoreHide Full Article

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 stocks presents investors with the better value opportunity right now? Let's take a closer look.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Victoria's Secret has a Zacks Rank of #1 (Strong Buy), while Industria de Diseno Textil SA has a Zacks Rank of #3 (Hold) right now. This means that VSXY's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle for value investors.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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 16.85, while IDEXY has a forward P/E of 24.93. We also note that VSXY has a PEG ratio of 0.61. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. IDEXY currently has a PEG ratio of 3.23.

Another notable valuation metric for VSXY is its P/B ratio of 7.3. 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 8.86.

These are just a few of the metrics contributing to VSXY's Value grade of B and IDEXY's Value grade of D.

VSXY stands above IDEXY thanks to its solid earnings outlook, and based on these valuation figures, we also feel that VSXY is the superior value option right now.

Published in