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Should Value Investors Buy Guess (GES) Stock?

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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.

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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One company to watch right now is Guess (GES - Free Report) . GES is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 15.89. This compares to its industry's average Forward P/E of 16.03. Over the past 52 weeks, GES's Forward P/E has been as high as 25.11 and as low as 15.81, with a median of 19.80.

Investors will also notice that GES has a PEG ratio of 0.91. 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. GES's industry currently sports an average PEG of 1.18. GES's PEG has been as high as 1.43 and as low as 0.90, with a median of 1.13, all within the past year.

Finally, our model also underscores that GES has a P/CF ratio of 24.23. 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. GES's P/CF compares to its industry's average P/CF of 42.98. Over the past 52 weeks, GES's P/CF has been as high as 36.09 and as low as 17.61, with a median of 26.57.

Value investors will likely look at more than just these metrics, but the above data helps show that Guess is likely undervalued currently. And when considering the strength of its earnings outlook, GES sticks out at as one of the market's strongest value stocks.


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