Is Signet (SIG) Stock Undervalued 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.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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 Signet (SIG). SIG is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 6.58 right now. For comparison, its industry sports an average P/E of 18.71. Over the past 52 weeks, SIG's Forward P/E has been as high as 9.32 and as low as 3.67, with a median of 6.17.

We also note that SIG holds a PEG ratio of 1.01. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. SIG's PEG compares to its industry's average PEG of 1.94. Within the past year, SIG's PEG has been as high as 1.43 and as low as 0.57, with a median of 0.95.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. SIG has a P/S ratio of 0.18. This compares to its industry's average P/S of 0.34.

Value investors will likely look at more than just these metrics, but the above data helps show that Signet is likely undervalued currently. And when considering the strength of its earnings outlook, SIG sticks out at as one of the market's strongest value stocks.

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
 
Signet Jewelers Limited (SIG) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.