Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 6 stocks made the list for top value stocks in the Specialty Retail 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 Specialty Retail 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.

Click the button below to learn more about A+ Investor and subscribe today.

6 Undervalued Specialty Retail Stocks

Of course, there are countless value stocks that are worth mentioning, but this is a concise list of the top 6 undervalued stocks in the Specialty Retail industry for Tuesday, October 29, 2024. Let’s take a closer look at their individual scores to see how they measure up against each other and the Specialty Retail 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.

Cango Inc.’s Value Grade

Value Grade:

Cango Inc. operates an automotive transaction service platform that connects dealers, original equipment manufacturers, financial institutions, car buyers, insurance brokers, and companies in the People’s Republic of China. The company offers automobile trading solutions comprising car sourcing, transaction facilitation, logistics, and warehousing support for dealers through Cango Haoche app that offers new car transaction services, and Cango U-Car app that offers used-car transaction services. It also provides automotive financing facilitation services that include facilitating financing transactions from financial institutions to car buyers, which comprises credit origination, credit assessment, credit servicing, and delinquent asset management services; facilitating financing transactions of car purchases for car buyers; and after-market services to car buyers, which includes facilitating the sale of insurance policies from insurance brokers or companies. The company was founded in 2010 and is headquartered in Shanghai, the People’s Republic of China.

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.

Cango Inc. has a Value Score of 86, which is considered to be undervalued.

When you look at Cango Inc.’s price-to-sales ratio at 0.50 compared to the industry median at 0.39, this company has a higher price relative to revenue compared to its peers. This could make Cango Inc.’s stock less attractive for value investors.

Cango Inc.’s price-earnings ratio is 83.00 compared to the industry median at 17.40. This means it has a higher share price relative to earnings compared to its peers. This could make Cango Inc. less 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. Cango Inc.’s shareholder yield is higher than its industry median ratio of 0.00%. 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. Cango Inc.’s price-to-book ratio is lower than its industry median ratio of 1.67. This could make Cango Inc. more attractive to investors looking for a new addition to their portfolio.

Designer Brands Inc.’s Value Grade

Value Grade:

Designer Brands Inc., together with its subsidiaries, engages in the design, production, and retailing of footwear and accessories for women, men, and kids primarily in the United States and Canada. The company operates through three segments: U.S. Retail, Canada Retail, and Brand Portfolio. It provides dress, casual, and athletic footwear and accessories, as well as handbags. The company offers its products under the Vince Camuto, Keds, Hush Puppies, Topo, Lucky Brand, Jessica Simpson, Le Tigre, and other brands. It offers its products through its direct-to-consumer stores; DSW mobile app; e-commerce sites, such as vincecamuto.com and topoathletic.com, as well as dsw.com, dsw.ca, and theshoecompany.ca websites; and a portfolio of banners, including DSW Designer Shoe Warehouse and The Shoe Company. The company was founded in 1991 and is based in Columbus, Ohio.

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.

Designer Brands Inc. has a Value Score of 90, which is considered to be undervalued.

Designer Brands Inc.’s price-to-book ratio is higher than its peers. This could make Designer Brands Inc. less attractive for value investors when compared to the industry median at 1.67.

You can read more about Designer Brands 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.

Jowell Global Ltd.’s Value Grade

Value Grade:

Jowell Global Ltd. engages in the online retail of cosmetics, health and nutritional supplements, and household products in China. It offers health and nutritional supplements and foods, such as immune system regulator, bone health, and beauty and beauty supplements products; cosmetics, including lipstick, foundation, cream, eyebrow pencil, makeup remover, lip enamel, eye shadow and liner, and mascara; skin care comprising eye cream and mask, sunscreen and skin cream, moisturizing water, lotion, hand cream, cleansing and face cream, essence, and facial mask; and body care that include body wash, shampoo, hair conditioner, hand sanitizer, essential oil, toothpaste, mouthwash, essential oil soap, and styling gel. The company also provides baby and children, such as lip balm, baby massage oil, moisture cream, shower gel, shampoo, hand sanitizer, baby toothpaste, diaper, and baby soap; washing items, including detergent, washing powder and tablet, washing liquid, kitchen cleaner, soap, and pipe dredger; fragrances comprising traditional herbal lotion, perfume for men and women, fragrant ball, and air purifying box; food that include fruits, vegetables, snacks, roasted sunflower seeds and nuts, biscuits and pastries, health foods, beverages, wines, prepared products, kitchen seasoning, and dry grain and oil. In addition, it offers electronics, such as large electronic, home appliances, kitchen, and cosmetic electronic appliances; apparel, including men and women clothes, shoes, bags, suitcases, and accessories; and household products comprising home textile and decoration, maternal and infant products, kitchenware, and daily life necessities. Further, the company sells its products through retail stores under the Love Home Store, LHH Store, and Juhao Best Choice Store names. It operates through online marketplace that enables third-party sellers to sell their products to company consumers. The company was founded in 2012 and is based in Shanghai, China.

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.

Jowell Global Ltd. has a Value Score of 90, which is considered to be undervalued.

Jowell Global Ltd.’s price-to-book ratio is higher than its peers. This could make Jowell Global Ltd. less attractive for value investors when compared to the industry median at 1.67.

You can read more about Jowell Global 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.

Lands' End, Inc.’s Value Grade

Value Grade:

Lands' End, Inc. operates as a digital retailer of apparel, swimwear, outerwear, accessories, footwear, home products, and uniform in the United States, Europe, Asia, and internationally. It operates through U.S. eCommerce, International, Outfitters, Third Party, and Retail segments. The company also sells uniform and logo apparel. It sells its products through e-commerce and company operated stores, as well as through third party distribution channels under the Lands’ End, Lands’ End Lighthouse, Squall, Tugless Tank, Drifter, Outrigger, and Marinac, Beach Living brands, as well as Supima, No-Gape, Starfish, Little Black Suit, Iron Knees, Hyde Park, Year’ Rounder, ClassMate, Willis & Geiger, and ThermaCheck brands. Lands’ End, Inc. was founded in 1963 and is headquartered in Dodgeville, Wisconsin.

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.

Lands' End, Inc. has a Value Score of 79, which is considered to be undervalued.

Lands' End, Inc.’s price-to-book ratio is lower than its peers. This could make Lands' End, Inc. more attractive for value investors when compared to the industry median at 1.67.

You can read more about Lands' End, 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.

Shoe Carnival, Inc.’s Value Grade

Value Grade:

Shoe Carnival, Inc., together with its subsidiaries, operates as a family footwear retailer in the United States. The company offers range of dress, casual, work, and athletic shoes, as well as sandals and boots for men, women, and children; and various accessories. The company also operates stores, and sells its products through online shopping at shoecarnival.com, as well as through mobile app. Shoe Carnival, Inc. was founded in 1978 and is headquartered in Evansville, Indiana.

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.

Shoe Carnival, Inc. has a Value Score of 77, which is considered to be undervalued.

Shoe Carnival, Inc.’s price-earnings ratio is 12.7 compared to the industry median at 17.4. This means that it has a lower price relative to its earnings compared to its peers. This makes Shoe Carnival, Inc. more attractive for value investors.

Shoe Carnival, Inc.’s price-to-book ratio is lower than its peers. This could make Shoe Carnival, Inc. fairly attractive for value investors when compared to the industry median at 1.67.

You can read more about Shoe Carnival, 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.

Urban Outfitters, Inc.’s Value Grade

Value Grade:

Urban Outfitters, Inc. engages in the retail and wholesale of general consumer products. The company operates through three segments: Retail, Wholesale, and Nuuly. It operates Urban Outfitters stores, which offer women’s and men’s fashion apparel, activewear, intimates, footwear, accessories, home goods, electronics, and beauty products for young adults aged 18 to 28; and Anthropologie stores that provide women’s apparel, accessories, intimates, shoes, and home furnishings, as well as gifts, decorative items, and beauty and wellness products for women aged 28 to 45. The company also operates Terrain stores that provide lifestyle home products, garden and outdoor living products, antiques, live plants, flowers, wellness products, and accessories. In addition, it operates Free People retail stores, which offer casual women’s apparel, intimates, activewear, shoes, accessories, home products, gifts, and beauty and wellness products for young women aged 25 to 30; and restaurants, as well as women’s apparel subscription rental service under the Nuuly brand. Further, the company is involved in the wholesale of young women’s contemporary casual apparel, intimates, activewear, and shoes under the Free People brand; and apparel collections under the Urban Outfitters brand. The company serves its customers directly through retail stores, websites, mobile applications, catalogs and customer contact centers, franchisee-owned stores, and department and specialty stores, as well as social media and third-party digital platforms. Urban Outfitters, Inc. was founded in 1970 and is based in Philadelphia, Pennsylvania.

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.

Urban Outfitters, Inc. has a Value Score of 74, which is considered to be undervalued.

Urban Outfitters, Inc.’s price-earnings ratio is 11.3 compared to the industry median at 17.4. This means that it has a lower price relative to its earnings compared to its peers. This makes Urban Outfitters, Inc. more attractive for value investors.

Urban Outfitters, Inc.’s price-to-book ratio is higher than its peers. This could make Urban Outfitters, Inc. less attractive for value investors when compared to the industry median at 1.67.

You can read more about Urban Outfitters, 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 Specialty Retail 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 Specialty Retail stocks as well as other industrys.

Choosing Which of the 6 Best Specialty Retail 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.

• Cango Inc. stock has a Value Grade of A.
• Designer Brands Inc. stock has a Value Grade of A.
• Jowell Global Ltd. stock has a Value Grade of A.
• Lands' End, Inc. stock has a Value Grade of B.
• Shoe Carnival, Inc. stock has a Value Grade of B.
• Urban Outfitters, Inc. stock has a Value Grade of B.

Now that you have a bit more background about each of the 6 undervalued stocks in the Specialty Retail 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 Specialty Retail Stocks

Want to learn more about Specialty Retail 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.

• 6 Undervalued Specialty Retail Stocks for Tuesday, October 29
• 7 Undervalued Specialty Retail Stocks for Monday, October 28
• 3 Undervalued Specialty Retail Stocks for Friday, October 25
• 3 Undervalued Specialty Retail Stocks for Thursday, October 24

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.