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Are Investors Undervaluing XCel Brands (XELB) Right Now?

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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.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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 to watch right now is XCel Brands (XELB - Free Report) . XELB is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 5.99, which compares to its industry's average of 15.39. Over the past 52 weeks, XELB's Forward P/E has been as high as 12.79 and as low as 5.99, with a median of 9.17.

Investors should also note that XELB holds a PEG ratio of 0.60. 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. XELB's industry currently sports an average PEG of 1.38. XELB's PEG has been as high as 1.22 and as low as 0.60, with a median of 0.89, all within the past year.

Finally, our model also underscores that XELB has a P/CF ratio of 8.09. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 9.66. Over the past year, XELB's P/CF has been as high as 18.53 and as low as 8.09, with a median of 11.25.

These are only a few of the key metrics included in XCel Brands's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, XELB looks like an impressive value stock at the moment.


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