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 use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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.
Shoe Carnival (SCVL - Free Report) is a stock many investors are watching right now. SCVL is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock holds a P/E ratio of 13.98, while its industry has an average P/E of 14.38. Over the past 52 weeks, SCVL's Forward P/E has been as high as 19.59 and as low as 11.50, with a median of 14.66.
Investors will also notice that SCVL has a PEG ratio of 1.24. 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. SCVL's industry currently sports an average PEG of 1.24. Over the past 52 weeks, SCVL's PEG has been as high as 1.37 and as low as 0.96, with a median of 1.10.
Another valuation metric that we should highlight is SCVL's P/B ratio of 1.87. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 3.91. Over the past year, SCVL's P/B has been as high as 2.28 and as low as 1.21, with a median of 1.77.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. SCVL has a P/S ratio of 0.55. This compares to its industry's average P/S of 0.58.
These are only a few of the key metrics included in Shoe Carnival'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, SCVL looks like an impressive value stock at the moment.