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Is Genesco (GCO) a Great Value Stock Right Now?

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find 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 use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One stock to keep an eye on is Genesco (GCO). GCO is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock is trading with a P/E ratio of 10.08, which compares to its industry's average of 12.10. GCO's Forward P/E has been as high as 14.22 and as low as 8.16, with a median of 10.97, all within the past year.

Investors should also recognize that GCO has a P/B ratio of 1.23. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 3.35. Within the past 52 weeks, GCO's P/B has been as high as 1.34 and as low as 0.83, with a median of 1.13.

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. GCO has a P/S ratio of 0.32. This compares to its industry's average P/S of 0.51.

These are only a few of the key metrics included in Genesco's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, GCO looks like an impressive value stock at the moment.


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