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 Monday, September 30, 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.

Columbia Sportswear Company’s Value Grade

Value Grade:

Columbia Sportswear Company is a multi-brand in outdoor, active and lifestyle products, including apparel, footwear, accessories, and equipment. The Company manages its product line in two categories: apparel, accessories, and equipment products and footwear products. It provides products through four brands: Columbia, SOREL, Mountain Hardwear, and prAna. Columbia brand offers outdoor apparel, footwear, accessories and equipment products suited for hiking, trail running, snow, and fishing and hunting activities, as well as everyday outdoor activities. SOREL brand offers footwear. Mountain Hardwear brand designs essential, premium apparel, accessories and equipment products for climbers, mountaineers, skiers, snowboarders, and trail athletes. prAna brand offers apparel, accessories and equipment products. The Company sells its products in approximately 100 countries and operates in four segments: United States, Latin America and Asia Pacific, Europe, Middle East and Africa, and Canada.

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.

Columbia Sportswear Company has a Value Score of 61, which is considered to be undervalued.

When you look at Columbia Sportswear Company’s price-to-sales ratio at 1.44 compared to the industry median at 0.74, this company has a higher price relative to revenue compared to its peers. This could make Columbia Sportswear Company’s stock less attractive for value investors.

Columbia Sportswear Company’s price-earnings ratio is 22.06 compared to the industry median at 19.47. This means it has a higher share price relative to earnings compared to its peers. This could make Columbia Sportswear Company less attractive for value investors.

Now, let’s assess Columbia Sportswear Company’s EV/EBITDA ratio, also known as enterprise multiple. At 11.2, when compared to the industry median of 10.0, 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. Columbia Sportswear Company’s shareholder yield is higher than its industry median ratio of 1.92%. 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. Columbia Sportswear Company’s price-to-book ratio is higher than its industry median ratio of 2.18. This could make Columbia Sportswear Company less attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at Columbia Sportswear Company’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Columbia Sportswear Company’s price-to-free-cash-flow ratio is lower than its industry median ratio of 12.52. This could make Columbia Sportswear Company more attractive because the lower P/FCF ratio indicates that Columbia Sportswear Company 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.

Forward Industries Inc’s Value Grade

Value Grade:

Forward Industries, Inc. is a design, sourcing and distribution company serving medical and technology customers worldwide. The Company operates through the two segments: OEM distribution and design. The Company’s design segment provides hardware and software product design and engineering services to customers predominantly located in the United States. The Company’s OEM distribution segment sources and sells carrying cases and other accessories for medical monitoring and diagnostic kits, as well as a variety of other portable electronic and non-electronic devices to original equipment manufacturers (OEMs), or their contract manufacturers worldwide, that either package its products as accessories in box together with their branded product offerings or sell them through their retail distribution channels. Its subsidiaries include Forward Industries (IN), Inc., Forward Industries (Switzerland) GmbH, Forward Industries UK Limited and 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.

Forward Industries Inc has a Value Score of 87, which is considered to be undervalued.

Forward Industries Inc’s price-earnings ratio is 4.9 compared to the industry median at 19.5. This means that it has a lower price relative to its earnings compared to its peers. This makes Forward Industries Inc more attractive for value investors.

Forward Industries Inc’s price-to-book ratio is lower than its peers. This could make Forward Industries Inc more attractive for value investors when compared to the industry median at 2.18.

You can read more about Forward Industries 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.

PVH Corp’s Value Grade

Value Grade:

PVH Corp. is a fashion company. The Company’s main brands include Calvin Klein and Tommy Hilfiger. The Company designs and markets branded sportswear (casual apparel), jeanswear, performance apparel, intimate apparel, underwear, swimwear, dress shirts, handbags, accessories, footwear, and other related products. The Company manages its operations through its operating divisions, namely Tommy Hilfiger North America, Tommy Hilfiger International, Calvin Klein North America, Calvin Klein International, and Heritage Brands Wholesale. TOMMY HILFIGER represents the modern uniform for an aspirational lifestyle. The TOMMY HILFIGER brands principally consist of TOMMY HILFIGER and TOMMY JEANS. The Calvin Klein brands consist of Calvin Klein, Calvin Klein Jeans, Calvin Klein Underwear, Calvin Klein Performance and CK Calvin Klein. The Company sells its Calvin Klein and Tommy Hilfiger products through a variety of distribution channels, including wholesale, retail, and licensing.

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.

PVH Corp has a Value Score of 96, which is considered to be undervalued.

PVH Corp’s price-earnings ratio is 8.1 compared to the industry median at 19.5. This means that it has a lower price relative to its earnings compared to its peers. This makes PVH Corp more attractive for value investors.

PVH Corp’s price-to-book ratio is higher than its peers. This could make PVH Corp less attractive for value investors when compared to the industry median at 2.18.

You can read more about PVH 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.

Sunstock Inc’s Value Grade

Value Grade:

Sunstock, Inc. is engaged in buying, selling, and distributing precious metals. The Company is primarily focused on gold. The Company operates one precious metal retail store under the Mom's Silver Shop name in Sacramento, California. The Mom's Silver Shop specializes in buying and selling gold, silver, and rare coins, and is a precious metals retailer. The Company is also engaged in acquiring mining assets as well as rights to purchase mining production and to sell these metals primarily through retail channels, including their own branded coins. The Company intends to focus on projects that already own amounts of unrefined but already mined-gold ore and other precious metals.

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.

Sunstock Inc has a Value Score of 97, which is considered to be undervalued.

Sunstock Inc’s price-earnings ratio is 1.5 compared to the industry median at 19.5. This means that it has a lower price relative to its earnings compared to its peers. This makes Sunstock Inc more attractive for value investors.

Sunstock Inc’s price-to-book ratio is higher than its peers. This could make Sunstock Inc less attractive for value investors when compared to the industry median at 2.18.

You can read more about Sunstock 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 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.

• Columbia Sportswear Company stock has a Value Grade of B.
• Forward Industries Inc stock has a Value Grade of A.
• PVH Corp stock has a Value Grade of A.
• Sunstock Inc stock has a Value Grade of A.

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 Monday, September 30
• Why Canada Goose Holdings Inc’s (GOOS) Stock Is Up 6.83%
• Why Ermenegildo Zegna NV’s (ZGN) Stock Is Up 5.18%
• Why Lululemon Athletica Inc’s (LULU) Stock Is Up 4.16%

AAII Disclaimer

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