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Should Value Investors Buy Caleres Inc. (CAL) 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.

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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

Caleres Inc. (CAL - Free Report) is a stock many investors are watching right now. CAL is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 8.97, while its industry has an average P/E of 25.50. Over the last 12 months, CAL's Forward P/E has been as high as 14.23 and as low as 5.76, with a median of 10.48.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. CAL has a P/S ratio of 0.33. This compares to its industry's average P/S of 0.94.

Finally, we should also recognize that CAL has a P/CF ratio of 16.26. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 26.75. Over the past year, CAL's P/CF has been as high as 21.59 and as low as 7.66, with a median of 14.26.

These are only a few of the key metrics included in Caleres Inc.'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, CAL looks like an impressive value stock at the moment.


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