Back to top

Image: Bigstock

GCO vs. BHOOY: Which Stock Is the Better Value Option?

Read MoreHide Full Article

Investors interested in stocks from the Retail - Apparel and Shoes sector have probably already heard of Genesco (GCO - Free Report) and BOOHOO GRP PLC (BHOOY - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Currently, both Genesco and BOOHOO GRP PLC are holding a Zacks Rank of # 1 (Strong Buy). This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. But this is just one piece of the puzzle for value investors.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.

Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

GCO currently has a forward P/E ratio of 6.75, while BHOOY has a forward P/E of 40.80. We also note that GCO has a PEG ratio of 1.35. 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. BHOOY currently has a PEG ratio of 1.63.

Another notable valuation metric for GCO is its P/B ratio of 0.83. 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 13.65.

These are just a few of the metrics contributing to GCO's Value grade of A and BHOOY's Value grade of F.

Both GCO and BHOOY are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that GCO is the superior value option right now.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Genesco Inc. (GCO) - free report >>

Boohoo Group Plc Unsponsored ADR (BHOOY) - free report >>

Published in