iStockphoto
Validea's pick of the week provides a detailed report on a company that scores well in the stock-screening service's model portfolios. On Validea.ca, investors can analyze 1,000 Canadian stocks through 12 different guru-based models and get individual reports on each company. Globe Investor provides marketing and data services to Validea.ca and receives compensation. Try it.
Signet Jewelers is the world's largest retailer of diamond jewellery. The firm operates nearly 5,000 retail locations including the subsidiaries Zale Corp., Kay Jewelers and Jared.
Like many retail stocks, shares of Signet have taken a massive hit over the past year. Shares, which currently trade at around $46, were as high as $101 over the last year.
But the sell-off has resulted in many of Validea's value-focused models honing in on the stock as a potential opportunity. Specifically, the Ben Graham model gives the stock 100 per cent, while the John Neff and David Dreman models also rate the stock highly given its low P/E ratio.
Inspired by the Intelligent Investor, Validea's Graham strategy looks at a firm's sales, current ratio, long-term debt in relation to net current assets, earnings growth as well as a stock's P/E ratio and P/B. The full strategy can be found in the research report, but with a with a P/E of 10.6, which is well below the market multiple of around 23, and a P/B of 0.6, the stock trades at a very low valuation and it was these types of deeply discounted stocks that Graham looked for when seeking out value stocks.
The stock carries a 1.9-per-cent yield, so there is a dividend component for those investors who seek some yield when investing.
Click here for a complete breakdown of Validea's investing guru report.
Globe app users click here.
Read other research reports here.