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 Retailers - 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 Retailers - 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 Retailers - 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 Retailers - Apparel & Accessories industry for Thursday, July 04, 2024. Let’s take a closer look at their individual scores to see how they measure up against each other and the Retailers - 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.

AKA Brands Holding Corp’s Value Grade

Value Grade:

a.k.a. Brands Holding Corp. is a group of fashion brands for the consumers. The Company's brands share a common focus on Millennial and Gen Z consumers who seek fashion inspiration on social media and primarily shop online. It utilizes real-time data and consumer insights to identify the latest trends and work with its global sourcing network and brand partners to bring new products to market. It operates primarily in two geographies, the United States and Australia. It operates four brands: two women's brands, Princess Polly and Petal & Pup and two streetwear brands, Culture Kings and mnml. The brands offer its customers a curated assortment from third-party streetwear brands, as well as a large and growing portfolio of in-house designed brands and products that embody the relationship between music, sports, art and fashion. The Company's subsidiaries include a.k.a. Brands Intermediate Holding Corp., New Excelerate GP, Limited, AKA Brands, Inc., and CK Holdco Pty., Ltd., among others.

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.

AKA Brands Holding Corp has a Value Score of 70, which is considered to be undervalued.

When you look at AKA Brands Holding Corp’s price-to-sales ratio at 0.29 compared to the industry median at 0.43, this company has a lower price relative to revenue compared to its peers. This could make AKA Brands Holding Corp’s stock more attractive for value investors.

Now, let’s assess AKA Brands Holding Corp’s EV/EBITDA ratio, also known as enterprise multiple. At 35.1, when compared to the industry median of 7.9, the company may be considered overvalued in relation to its peers. Value investors could use the enterprise multiple to identify stocks that are considered overvalued or undervalued relative to their industry.

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. AKA Brands Holding Corp’s shareholder yield is higher than its industry median ratio of 1.63%. 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. AKA Brands Holding Corp’s price-to-book ratio is lower than its industry median ratio of 1.89. This could make AKA Brands Holding Corp more attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at AKA Brands Holding Corp’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. AKA Brands Holding Corp’s price-to-free-cash-flow ratio is lower than its industry median ratio of 10.85. This could make AKA Brands Holding Corp more attractive because the lower P/FCF ratio indicates that AKA Brands Holding Corp 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.

Hibbett Inc’s Value Grade

Value Grade:

Hibbett, Inc. is an athletic-inspired fashion retailer. The Company operates approximately 1,169 retail stores in 36 states, composed of 960 Hibbett stores, 193 City Gear stores and 16 Sports Additions athletic shoe stores. Its Hibbett stores average 5,800 square feet and are located primarily in strip centers, which are usually near a chain retailer. Its City Gear stores average 5,200 square feet and are located primarily in strip centers. Its Sports Additions stores average 2,900 square feet with the majority located in malls and usually near a Hibbett store. Its store base consisted of 912 stores located in strip centers, 32 free-standing stores and 225 enclosed mall locations. It offers personalized customer service and access to coveted footwear and apparel from top brands like Nike, Jordan and Adidas. It maintains a full-line wholesale and logistics facility in Alabaster, Alabama (a suburb of Birmingham) where the Company receives and ships its various merchandise.

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.

Hibbett Inc has a Value Score of 89, which is considered to be undervalued.

Hibbett Inc’s price-earnings ratio is 10.7 compared to the industry median at 13.2. This means that it has a lower price relative to its earnings compared to its peers. This makes Hibbett Inc more attractive for value investors.

Hibbett Inc’s price-to-book ratio is lower than its peers. This could make Hibbett Inc more attractive for value investors when compared to the industry median at 1.89.

You can read more about Hibbett 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.

Tillys Inc’s Value Grade

Value Grade:

Tilly's, Inc. is a specialty retailer of casual apparel, footwear, accessories, and hardgoods for young men, young women, boys and girls. The Company’s stores are located in a variety of retail centers, including malls, lifestyle centers, power centers, community centers, outlet centers, and street-front locations. Customers may also shop online, where it features the same assortment of products as is carried in its stores, supplemented by additional online-only styles. The Company operates over 248 stores in 33 states. The Company's third-party brands include adidas, Champion, Dr. Martens, BDG, Converse, Edikted, Billabong, Crocs, Ethika, Birkenstock, Diamond Supply, Free People, Brixton, Dickies, G-Shock, Herschel Supply Co., HUF, Hydro Flask, Jansport, Levi's and others. It supplements its third-party merchandise assortment with its own proprietary brands across many of its product categories. It sells merchandise over the Internet through its e-commerce Website, www.tillys.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.

Tillys Inc has a Value Score of 72, which is considered to be undervalued.

Tillys Inc’s price-to-book ratio is higher than its peers. This could make Tillys Inc less attractive for value investors when compared to the industry median at 1.89.

You can read more about Tillys 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.

Tapestry Inc’s Value Grade

Value Grade:

Tapestry, Inc. is a global house of luxury accessories and lifestyle brands. The Company's brands include Coach, Kate spade New York, and Stuart Weitzman. The Company operates through three segments: Coach, Kate Spade and Stuart Weitzman. The Coach segment includes global sales of Coach products to customers through Coach operated stores, including e-commerce sites and concession shop-in-shops, and sales to wholesale customers and through independent third-party distributors. The Kate Spade segment includes global sales primarily of kate spade new york brand products to customers through Kate Spade operated stores, including e-commerce sites and concession shop-in-shops, sales to wholesale customers, and through independent third-party distributors. The Stuart Weitzman segment includes global sales of Stuart Weitzman brand products primarily through Stuart Weitzman operated stores, sales to wholesale customers, through e-commerce sites, and through independent third-party distributors.

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.

Tapestry Inc has a Value Score of 69, which is considered to be undervalued.

Tapestry Inc’s price-earnings ratio is 10.6 compared to the industry median at 13.2. This means that it has a lower price relative to its earnings compared to its peers. This makes Tapestry Inc more attractive for value investors.

Tapestry Inc’s price-to-book ratio is lower than its peers. This could make Tapestry Inc more attractive for value investors when compared to the industry median at 1.89.

You can read more about Tapestry 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.

Other Retailers - 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 Retailers - Apparel & Accessories stocks as well as other industrys.

Choosing Which of the 4 Best Retailers - 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.

• AKA Brands Holding Corp stock has a Value Grade of B.
• Hibbett Inc stock has a Value Grade of A.
• Tillys Inc stock has a Value Grade of B.
• Tapestry Inc stock has a Value Grade of B.

Now that you have a bit more background about each of the 4 undervalued stocks in the Retailers - 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 Retailers - Apparel & Accessories Stocks

Want to learn more about Retailers - 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 Retailers - Apparel & Accessories Stocks for Thursday, July 04
• 3 Undervalued Retailers - Apparel & Accessories Stocks for Wednesday, July 03
• Why Genesco Inc’s (GCO) Stock Is Up 4.05%
• 5 Undervalued Retailers - Apparel & Accessories Stocks for Tuesday, July 02

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