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.

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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 Monday, November 11, 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.

Torrid Holdings Inc.’s Value Grade

Value Grade:

Torrid Holdings Inc. operates in women’s plus-size apparel and intimates market in North America. The company designs, develops, and merchandises its products under the Torrid, Torrid Curve, CURV, and Lovesick brand names. It is involved in the sale of tops, bottoms, dresses, denims, activewear, intimates, sleep wear, swim wear, and outerwear products; and non-apparel products comprising accessories, footwear, and beauty products. The company sells its products directly to consumers through its e-commerce platform and its physical stores. Torrid Holdings Inc. was incorporated in 2019 and is headquartered in City Of Industry, California.

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.

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

When you look at Torrid Holdings Inc.’s price-to-sales ratio at 0.36 compared to the industry median at 0.43, this company has a lower price relative to revenue compared to its peers. This could make Torrid Holdings Inc.’s stock more attractive for value investors.

Torrid Holdings Inc.’s price-earnings ratio is 32.50 compared to the industry median at 19.50. This means it has a higher share price relative to earnings compared to its peers. This could make Torrid Holdings Inc. less attractive for value investors.

Now, let’s assess Torrid Holdings Inc.’s EV/EBITDA ratio, also known as enterprise multiple. At 8.8, when compared to the industry median of 13.6, the company may be considered undervalued 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. Torrid Holdings Inc.’s shareholder yield is lower 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.

Lastly, let’s take a look at Torrid Holdings Inc.’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Torrid Holdings Inc.’s price-to-free-cash-flow ratio is lower than its industry median ratio of 23.70. This could make Torrid Holdings Inc. more attractive because the lower P/FCF ratio indicates that Torrid Holdings 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.

Haverty Furniture Companies, Inc.’s Value Grade

Value Grade:

Haverty Furniture Companies, Inc. operates as a specialty retailer of residential furniture and accessories in the United States. The company offers furniture merchandise under the Havertys brand name. It also provides custom upholstery products and eclectic looks; and mattress product lines under the Tempur-Pedic, Serta, Sealy, and Stearns and Foster names. The company sells home furnishings through its retail stores, as well as through its website. Haverty Furniture Companies, Inc. was founded in 1885 and is headquartered in Atlanta, Georgia.

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.

Haverty Furniture Companies, Inc. has a Value Score of 73, which is considered to be undervalued.

Haverty Furniture Companies, Inc.’s price-earnings ratio is 14.3 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 Haverty Furniture Companies, Inc. more attractive for value investors.

Haverty Furniture Companies, Inc.’s price-to-book ratio is higher than its peers. This could make Haverty Furniture Companies, Inc. less attractive for value investors when compared to the industry median at 1.66.

You can read more about Haverty Furniture Companies, 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.

J.Jill, Inc.’s Value Grade

Value Grade:

J.Jill, Inc. operates as an omnichannel retailer for women’s apparel under the J.Jill brand in the United States. It offers apparel, footwear, and accessories, including scarves and jewelry. The company markets its products through retail stores, website, and catalogs. J.Jill, Inc. was founded in 1959 and is headquartered in Quincy, Massachusetts.

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.

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

J.Jill, Inc.’s price-earnings ratio is 9.0 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 J.Jill, Inc. more attractive for value investors.

J.Jill, Inc.’s price-to-book ratio is lower than its peers. This could make J.Jill, Inc. more attractive for value investors when compared to the industry median at 1.66.

You can read more about J.Jill, 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.

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 81, 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 1.66.

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.

Sonic Automotive, Inc.’s Value Grade

Value Grade:

Sonic Automotive, Inc. operates as an automotive retailer in the United States. It operates in three segments, Franchised Dealerships, EchoPark, and Powersports. The Franchised Dealerships segment is involved in the sale of new and used cars and light trucks, and replacement parts; provision of vehicle maintenance, manufacturer warranty repair, and paint and collision repair services; and arrangement of extended warranties, service contracts, financing, insurance, and other aftermarket products for its guests. The EchoPark segment sells used cars and light trucks; and arranges finance and insurance product sales for its guests in pre-owned vehicle specialty retail locations. The Powersports Segment sells new and used powersports vehicles, such as motorcycles, and personal watercraft and all-terrain vehicles; and offers finance and insurance services. The company was incorporated in 1997 and is based in Charlotte, North Carolina.

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.

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

Sonic Automotive, Inc.’s price-earnings ratio is 11.5 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 Sonic Automotive, Inc. more attractive for value investors.

Sonic Automotive, Inc.’s price-to-book ratio is lower than its peers. This could make Sonic Automotive, Inc. more attractive for value investors when compared to the industry median at 1.66.

You can read more about Sonic Automotive, 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.

Tilly's, Inc.’s Value Grade

Value Grade:

Tilly's, Inc. operates as a specialty retailer of casual apparel, footwear, accessories, and hardgoods for young men and women, and boys and girls in the United States. Its apparel merchandise includes tops, outerwear, bottoms, swim, and dresses; and accessories merchandise comprises backpacks, hydration bottles, hats, sunglasses, small electronics and accessories, handbags, watches, jewelry, and others. The company also provides third-party merchandise assortment across its various product categories. The company sells its merchandise through its stores and e-commerce website, www.tillys.com. Tilly's, Inc. was founded in 1982 and is headquartered in Irvine, California.

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.

Tilly's, Inc. has a Value Score of 84, which is considered to be undervalued.

Tilly's, Inc.’s price-to-book ratio is higher than its peers. This could make Tilly's, Inc. less attractive for value investors when compared to the industry median at 1.66.

You can read more about Tilly's, 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.

• Torrid Holdings Inc. stock has a Value Grade of B.
• Haverty Furniture Companies, Inc. stock has a Value Grade of B.
• J.Jill, Inc. stock has a Value Grade of B.
• Lands' End, Inc. stock has a Value Grade of A.
• Sonic Automotive, Inc. stock has a Value Grade of A.
• Tilly's, Inc. stock has a Value Grade of A.

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 Monday, November 11
• 7 Undervalued Specialty Retail Stocks for Friday, November 08
• 3 Undervalued Specialty Retail Stocks for Thursday, November 07
• 6 Undervalued Specialty Retail Stocks for Wednesday, November 06

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.