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Are Investors Undervaluing DSW (DSW) Right Now?

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

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.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One company value investors might notice is DSW (DSW). DSW is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 12.60, which compares to its industry's average of 12.64. Over the past year, DSW's Forward P/E has been as high as 19.51 and as low as 11.60, with a median of 14.33.

Another valuation metric that we should highlight is DSW's P/B ratio of 2.13. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 3.42. Over the past year, DSW's P/B has been as high as 2.98 and as low as 1.58, with a median of 2.13.

These figures are just a handful of the metrics value investors tend to look at, but they help show that DSW is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, DSW feels like a great value stock at the moment.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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