4 Undervalued Retailers With Impressive Profitability

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Includes: BID, GES, JOSB, VRA
by: Kapitall

Do you like gaining exposure to consumer spending trends? For a closer look at stocks in the retail sector, we ran a screen.

We began by screening US-traded retail stocks with market caps above $100 million for those that appear undervalued relative to earnings growth, with PEG below 1.

We then screened these names for those with impressive profitability relative to their industry peers, seeing higher gross, operating, and pretax margins than their industry averages. We also screened for those with pretax profit margins beating their industry averages by at least 5%.

Interactive Chart: Press Play to compare changes in market cap over the last two years for the stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.

Do you think these stocks should be trading higher? Use this list as a starting point for your own analysis.

List sorted by difference between pretax margin and industry average.

1. Sotheby's (NYSE:BID): An auctioneer of various properties including fine art, antiques, decorative art, jewelry, and collectibles. Market cap at $2.53B. Price at $37.11. PEG at 0.86. TTM gross margin at 56.51% vs. industry average at 52.68%. TTM operating margin at 33.17% vs. industry average at 20.42%.TTM pretax margin at 27.82% vs. industry average at 18.05%.

2. Jos. A Bank Clothiers Inc. (NASDAQ:JOSB): Design, retails, and direct-markets men's tailored and casual clothing and accessories. Market cap at $1.35B. Price at $48.14. PEG at 0.93. TTM gross margin at 64.74% vs. industry average at 37.95%. TTM operating margin at 16.27% vs. industry average at 10.21%.TTM pretax margin at 16.27% vs. industry average at 9.4%.

3. Guess? Inc. (NYSE:GES): Engages in the design, marketing, distribution, and licensing of apparel and accessories for men, women, and children. Market cap at $2.65B. Price at $29.87. PEG at 0.87. TTM gross margin at 43.72% vs. industry average at 37.95%. TTM operating margin at 11.55% vs. industry average at 10.21%.TTM pretax margin at 15.56% vs. industry average at 9.4%.

4. Vera Bradley Designs, Inc. (NASDAQ:VRA): Engages in the design, production, marketing, and retail of functional accessories for women under the Vera Bradley brand. Market cap at $1.12B. Price at $26.93. PEG at 0.91. TTM gross margin at 57.95% vs. industry average at 53.34%. TTM operating margin at 19.14% vs. industry average at 16.22%.TTM pretax margin at 20.62% vs. industry average at 15.41%.

*Profitability data sourced from Fidelity, all other data sourced from Finviz.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.