Is Delta Apparel (DLA) a Great Value Stock Right Now?
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One stock to keep an eye on is Delta Apparel (DLA). DLA is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 18.17, which compares to its industry's average of 21.94. Over the past year, DLA's Forward P/E has been as high as 328.50 and as low as 13.69, with a median of 15.86.
We also note that DLA holds a PEG ratio of 1.07. 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. DLA's PEG compares to its industry's average PEG of 2.01. Within the past year, DLA's PEG has been as high as 1.20 and as low as 0.94, with a median of 1.07.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. DLA has a P/S ratio of 0.35. This compares to its industry's average P/S of 0.76.
Value investors will likely look at more than just these metrics, but the above data helps show that Delta Apparel is likely undervalued currently. And when considering the strength of its earnings outlook, DLA sticks out at as one of the market's strongest value stocks.
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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.