Investors interested in stocks from the Retail - Apparel and Shoes sector have probably already heard of Boot Barn (BOOT - Free Report) and BOOHOO GRP PLC (BHOOY - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Right now, Boot Barn is sporting a Zacks Rank of #1 (Strong Buy), while BOOHOO GRP PLC has a Zacks Rank of #2 (Buy). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that BOOT is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks 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.
BOOT currently has a forward P/E ratio of 23.72, while BHOOY has a forward P/E of 51.77. We also note that BOOT has a PEG ratio of 1.58. 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. BHOOY currently has a PEG ratio of 1.95.
Another notable valuation metric for BOOT is its P/B ratio of 4.19. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, BHOOY has a P/B of 11.86.
These are just a few of the metrics contributing to BOOT's Value grade of B and BHOOY's Value grade of D.
BOOT stands above BHOOY thanks to its solid earnings outlook, and based on these valuation figures, we also feel that BOOT is the superior value option right now.