Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 4 stocks made the list for top value stocks in the Apparel & Accessories industry. Those looking for value stocks to add to their portfolio may want to use this list as a starting point for further investment research.

Why Focus on Undervalued Apparel & Accessories Stocks?

Value investors seek to buy stocks at a discount to their intrinsic value. Long-term returns show that such strategies are advantageous. Value stocks, as a group, tend to outperform growth stocks over extended periods of time. Typically, value investors perform financial analysis of numerous metrics, don’t follow the herd and are long-term investors.

AAII’s A+ Investor Value Grade is derived from a stock’s Value Score. The Value Score is the percentile rank of the average of the percentile ranks of the price-to-sales ratio, price-earnings ratio, enterprise-value-to-EBITDA (EV/EBITDA) ratio, shareholder yield, price-to-book-value ratio and price-to-free-cash-flow ratio. The score is variable, meaning it can consider all six ratios or, should any of the six ratios not be valid, the remaining ratios that are valid. To be assigned a Value Score, stocks must have a valid (non-null) ratio and corresponding ranking for at least two of the six valuation ratios.

What Goes Into AAII’s Value Grade?

Stock evaluation requires access to huge amounts of data as well as the knowledge and time to sift through it all, make sense of financial ratios, read income statements and analyze recent stock movement. AAII created A+ Investor, a robust data suite that condenses data research in an actionable and customizable way suitable for investors of all knowledge levels, to help investors with that task.

AAII’s proprietary stock grades come with A+ Investor. These offer intuitive A–F grades for more than just value. It is possible for a stock to appear cheap based on one valuation metric but appear expensive on another. It is also possible for one valuation ratio to be associated with outperforming stocks during certain periods of time but not others. Some stocks may even have null values for certain metrics like the price-earnings ratio or the price-to-book ratio but not others. An example of this would be a company with losses instead of profits or a negative book value because of heavy borrowing. Negative earnings or book value result in non-meaningful ratios that are left blank or null.

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4 Undervalued Apparel & Accessories Stocks

Of course, there are countless value stocks that are worth mentioning, but this is a concise list of the top 4 undervalued stocks in the Apparel & Accessories industry for Wednesday, May 22, 2024. Let’s take a closer look at their individual scores to see how they measure up against each other and the Apparel & Accessories industry median.

The Value Grade is assigned based on how each stock’s composite valuation compares to all other stocks.

The process for assigning grades starts with each variable for a given stock. The percentile rankings for all valid ratios that a stock has are calculated. So, for instance, a stock could have a price-to-book ranking in the 43rd percentile, a price-earnings ranking in the 67th percentile, a price-to-sales ranking in the 23rd percentile, etc. Then, those rankings are averaged for each stock. (A minimum of two valid variables are required, though all six will be used if available.)

Once the average of the individual variables is calculated, that average is ranked against all stocks. Put another way, each stock’s composite valuation is compared to all other stocks. These ranks are then sorted into quintiles from the cheapest 20% (a grade of A) to the most expensive 20% (a grade of F).

As always, we recommend that you conduct proper due diligence and research before investing in any security. We also suggest that investors utilize numerous grades, not just value, when it comes to deciding whether a company is a good fit for their allocation needs.

Delta Apparel, Inc.’s Value Grade

Value Grade:

Delta Apparel, Inc. is a vertically integrated, international apparel company. The Company designs, manufactures, sources, and market a diverse portfolio of core activewear and lifestyle apparel products under its primary brands of Salt Life, Soffe, and Delta. It operates through two segments: Delta Group and Salt Life Group. The Delta Group segment consists of its business units primarily focused on activewear styles: DTG2Go and Delta Activewear. The Salt Life Group segment comprises its Salt Life business, which is built on the authentic, aspirational Salt Life lifestyle brand. Delta Activewear is a preferred supplier of activewear apparel to regional and global brands, as well as direct-to-retail and wholesale markets. It also specializes in selling casual and athletic products through a variety of distribution channels and tiers. Its On-Demand DC digital solution provides retailers and brands with immediate access to utilize DTG2Go’s network of print and fulfillment facilities.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Delta Apparel, Inc. has a Value Score of 98, which is considered to be undervalued.

When you look at Delta Apparel, Inc.’s price-to-sales ratio at 0.03 compared to the industry median at 0.78, this company has a lower price relative to revenue compared to its peers. This could make Delta Apparel, Inc.’s stock more attractive for value investors.

Shareholder yield is the sum of a stock’s dividend yield (paid over previous 12 months minus special dividends) and the percentage of net share buybacks over the previous 12 months. Delta Apparel, Inc.’s shareholder yield is lower than its industry median ratio of 1.65%. Value investors may look for an attractive shareholder yield because it can be a powerful tool for identifying if the company has a good management team.

As one of the most common value metrics, the price-to-book ratio evaluates a company’s current market price relative to its book value. Delta Apparel, Inc.’s price-to-book ratio is lower than its industry median ratio of 1.77. This could make Delta Apparel, Inc. more attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at Delta Apparel, Inc.’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Delta Apparel, Inc.’s price-to-free-cash-flow ratio is lower than its industry median ratio of 11.90. This could make Delta Apparel, Inc. more attractive because the lower P/FCF ratio indicates that Delta Apparel, Inc. is undervalued. The P/FCF ratio metric can also be viewed over a long-term time frame to see if the company's cash flow to share price value is generally improving or worsening.

Canada Goose Holdings Inc’s Value Grade

Value Grade:

Canada Goose Holdings Inc. is a Canada-based lifestyle brand and a manufacturer of performance luxury apparel. The Company designs, manufactures, and sells performance luxury apparel for men, women, youth, children, and babies. The Company’s product offerings include various styles of parkas, lightweight down jackets, rainwear, wind wear, apparel, fleece, footwear, and accessories for the fall, winter, and spring seasons. It operates through three segments: Direct-to-Consumer (DTC), Wholesale, and Other. The DTC segment comprises sales through country specific e-commerce platforms available across numerous markets, which includes the recommerce platform Canada Goose Generations, and Company-owned retail stores located in luxury shopping locations. Its Wholesale segment comprises sales made to a mix of retailers and international distributors. It has its operations in Canada, the United States, North America, Asia Pacific and Europe, the Middle East, Africa (EMEA).

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Canada Goose Holdings Inc has a Value Score of 67, which is considered to be undervalued.

Canada Goose Holdings Inc’s price-earnings ratio is 23.5 compared to the industry median at 20.0. This means that it has a higher price relative to its earnings compared to its peers. This makes Canada Goose Holdings Inc less attractive for value investors.

Canada Goose Holdings Inc’s price-to-book ratio is lower than its peers. This could make Canada Goose Holdings Inc more attractive for value investors when compared to the industry median at 1.77.

You can read more about Canada Goose Holdings Inc’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

JX Luxventure Ltd’s Value Grade

Value Grade:

JX Luxventure Ltd, formerly KBS Fashion Group Limited, is a casual menswear company in China. The Company is engaged in the designing, marketing, and selling the company's own line of fashion menswear. The Company's apparel products include outerwear, knitwear, denim, tops, bottoms, accessories and footwear, primarily targeting urban males between the ages of 20 and 40 in the Tier II and Tier III cities in China. The Company's distributor network consists of approximately 30 distributors in approximately 32 provinces. The Company also conducts the online and offline cross-border business via Flower Crown, provides packaged group tour services via Heyang Travel. The Company also provides selling carrier services through the Company's website(www.jxluxventure.com).

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

JX Luxventure Ltd has a Value Score of 99, which is considered to be undervalued.

JX Luxventure Ltd’s price-earnings ratio is 2.6 compared to the industry median at 20.0. This means that it has a lower price relative to its earnings compared to its peers. This makes JX Luxventure Ltd more attractive for value investors.

JX Luxventure Ltd’s price-to-book ratio is higher than its peers. This could make JX Luxventure Ltd less attractive for value investors when compared to the industry median at 1.77.

You can read more about JX Luxventure Ltd’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

VF Corp’s Value Grade

Value Grade:

V.F. Corporation is an apparel, footwear, and accessories company. The Company owns a broad portfolio of brands in the outerwear, footwear, apparel, backpack, luggage, and accessories categories. Its brands include Vans, The North Face, Timberland, and Dickies. The Company operates through three segments: Outdoor segment, Active segment, and Work segment. The Outdoor segment's product offerings include performance-based and outdoor apparel, footwear and equipment. The Active segment's product offerings include active apparel, footwear, backpacks, luggage and accessories. Its Work segment consists of work and work-inspired lifestyle brands with product offerings that include apparel, footwear and accessories. Its brands include Dickies, and Timberland PRO. The Company's direct-to-consumer business includes VF-operated retail stores, brand e-commerce sites, concession retail locations and other digital platforms.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

VF Corp has a Value Score of 75, which is considered to be undervalued.

VF Corp’s price-to-book ratio is lower than its peers. This could make VF Corp more attractive for value investors when compared to the industry median at 1.77.

You can read more about VF Corp’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Other Apparel & Accessories Stock Grades

Value is just one of the five Stock Grades included in our A+ Investor service. AAII members can see the top-graded stocks—those with grades of A or B for value, growth, momentum, earnings estimate revisions and quality—on the A+ Stock Grades Screener.

Also, if you want full access to all of AAII’s premium services, you can subscribe to one convenient bundled plan called AAII Platinum where you can try out A+ Investor, AAII Dividend Investing, the Stock Superstars Report, Growth Investing and VMQ Stocks. With the other premium services, you can dive deep into additional metrics, portfolios, commentary and information about Apparel & Accessories stocks as well as other industrys.

Choosing Which of the 4 Best Apparel & Accessories Stocks Is Right for You

Choosing which value stocks to invest in will ultimately depend on your individual goals and allocation; however, comparing similar value stocks in the same industry can help you analyze which might be better investments for you in the long run. So, let’s take a look at the Value Grade for all of our stocks.

• Delta Apparel, Inc. stock has a Value Grade of A.
• Canada Goose Holdings Inc stock has a Value Grade of B.
• JX Luxventure Ltd stock has a Value Grade of A.
• VF Corp stock has a Value Grade of B.

Now that you have a bit more background about each of the 4 undervalued stocks in the Apparel & Accessories industry as well as their overall grades, it’s time for you to conduct additional research to see if these could fit your portfolio needs based on your goals and risk tolerance. AAII can help you figure out both and identify which investments align with what works best for you.

We do so through a program of education that teaches you to invest for yourself and become an effective manager of your own wealth—no more relying on others for your financial independence. You can rely on AAII for timeless articles on financial planning and stock-picking, unbiased research and actionable analysis that makes you a better investor.

A+ Investor adds to that qualitative teaching by giving you a powerful data suite that helps you whittle down investment decisions to find stocks, exchange-traded funds (ETFs) or mutual funds that meet your needs.

Additional Resources About Apparel & Accessories Stocks

Want to learn more about Apparel & Accessories stocks to see if they could be the right investment for you? Check out some additional resources and articles to help you on your financial journey.

• 4 Undervalued Apparel & Accessories Stocks for Wednesday, May 22
• Why Canada Goose Holdings Inc’s (GOOS) Stock Is Up 6.63%
• 3 Undervalued Apparel & Accessories Stocks for Friday, May 17
• 3 Undervalued Apparel & Accessories Stocks for Thursday, May 16

AAII Disclaimer

We make no representations or warranties that any investor will, or is likely to, achieve profits similar to those shown, because past, hypothetical or simulated performance is not necessarily indicative of future results. Before making an investment decision, you should consider your circumstances and whether the information on our content is applicable to your situation. This information was prepared in good faith and we accept no liability for any errors or omissions. The full disclaimer can be read here.