Investors looking for stocks in the Retail - Apparel and Shoes sector might want to consider either Foot Locker (FL) or Kering SA (PPRUY). 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.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. 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.
Currently, Foot Locker has a Zacks Rank of #2 (Buy), while Kering SA has a Zacks Rank of #5 (Strong Sell). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that FL is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when 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.
FL currently has a forward P/E ratio of 16.68, while PPRUY has a forward P/E of 19.35. We also note that FL has a PEG ratio of 0.61. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. PPRUY currently has a PEG ratio of 17.91.
Another notable valuation metric for FL is its P/B ratio of 0.81. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, PPRUY has a P/B of 1.69.
These are just a few of the metrics contributing to FL's Value grade of A and PPRUY's Value grade of C.
FL has seen stronger estimate revision activity and sports more attractive valuation metrics than PPRUY, so it seems like value investors will conclude that FL is the superior option right now.
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Foot Locker, Inc. (FL) : Free Stock Analysis Report
Kering SA (PPRUY) : Free Stock Analysis Report
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