Are These Consumer Discretionary Stocks Undervalued Right Now?

While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One stock to keep an eye on is Academy Sports and Outdoors (ASO). ASO is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A.

Investors should also note that ASO holds a PEG ratio of 0.48. 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. ASO's industry currently sports an average PEG of 0.79. Within the past year, ASO's PEG has been as high as 3.65 and as low as 0.41, with a median of 2.06.

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. ASO has a P/S ratio of 0.58. This compares to its industry's average P/S of 1.56.

If you're looking for another solid Leisure and Recreation Products value stock, take a look at Malibu Boats (MBUU). MBUU is a # 2 (Buy) stock with a Value score of A.

Additionally, Malibu Boats has a P/B ratio of 3.56 while its industry's price-to-book ratio sits at 10.57. For MBUU, this valuation metric has been as high as 6.16, as low as 3.21, with a median of 4.35 over the past year.

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

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Academy Sports and Outdoors, Inc. (ASO) : Free Stock Analysis Report
 
Malibu Boats, Inc. (MBUU) : Free Stock Analysis Report
 
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