Time New York: Sat 03 Dec 01:52 am  |  Save 15% on H&R Block Online

  
caticonslite_bm_alt

3 Reasons Value Stock Investors Will Love Caleres (CAL)

Zacks

Many investors like to look for value in stocks, but this can be very tough to define. There is great debate regarding which metrics are the best to focus on in this regard, and which are not really quality indicators of future performance. Fortunately, with our new style score system we have identified the key statistics to pay close attention to and thus which stocks might be the best for value investors in the near term.

This method discovered several great candidates for value-oriented investors, but today let’s focus on Caleres, Inc. CAL as this stock is looking especially impressive right now. And while there are numerous reasons why this is the case, we have highlighted three of the most vital reasons for CAL’s status as a solid value stock below:

Forward PE for Caleres

Easily one of the most popular readings for value investors, the forward PE ratio shows us the current price of a stock divided by the full year earnings. Generally speaking, value investors like to see this ratio below 20, though it can vary by industry.


Right now, CAL has a forward PE of just 16.01, which means that investors are paying $16.01 for each dollar in expected Caleres earnings this year. Compared to the industry at large this is pretty favorable as the overall space has an average PE of 18.31 in comparison.

Price to Forward Sales for Caleres

One of the most underrated ratios for value investors is the price/forward sales metric. This ratio shows investors how much they are paying for each dollar of revenues generated. In other words, a lower number is better here while a price to sales ratio of 1 means that you are paying one dollar for each dollar in sales.

CALERES INC PE Ratio (TTM)

With a P/S ratio of 0.55, CAL investors are paying 55 cents in stock price for each dollar of revenue generated by the company. Compare this to the industry average of 1.30, and it is safe to say that CAL is undervalued compared to many of its peers on this important metric.

CAL Earnings Estimate Revisions Moving in the Right Direction

The solid value ratios outlined in the preceding paragraphs might be enough for some investors, but we should also note that the earnings estimate revisions have been trending in a positive direction as well. Analysts who follow CAL stock have been raising their estimates for the company lately, meaning that the EPS picture is looking a bit more favorably for Caleresnow.

Over the past 30 days, 3 earnings estimates have gone higher compared to none lower for the full year, while we are also seeing that 2 estimate has move upwards with no downward revision for the next year time frame too. These revisions have helped to boost the consensus estimate as 30 days ago CAL was expected to post earnings of $2.02 per share for the full year though today it looks to have EPS of $2.07 for the full year.

Bottom Line

For the reasons detailed above, investors shouldn’t be surprised to read that we have CAL as a stock with a Value Score of ‘A’ and a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

So if you are a value investor, definitely keep CAL on your short list as this looks to be a stock that is very well-positioned for gains in the near term.

Zacks' Top Investment Ideas for Long-Term Profit

How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

To read this article on Zacks.com click here.
<-- You can share this post with your network,
or give us your opinion and leave a comment.
Be sure to check our RSS feeds for updates.