Signet Jewelers (SIG) has been a bottom fishers delight the past couple weeks. But is the opportunity gone
This Zacks #1 Rank (Strong Buy) is still showing a great earnings trend, but thanks to late-summer market woes the valuations are great too.
Company Description
Signet Jewelers operates over 1,800 retail jewelry stores, predominantly in the U.S under the “Kay Jewelers” and “Jared The Galleria Of Jewelry” brands.
Estimates Still Rising
Analysts have been actively raising estimates since the last earnings release, which was back on Aug 25. Those better than expected results as well as a recently announced share repurchase program have Wall Street pretty optimistic.
This year’s Zacks Consensus Estimate, fiscal 2012, is up 22 cents to $3.57. Next year’s average forecast rose 13 cents, to $3.92. That puts projected growth rates at 34% and 10%, respectively.
Earnings History
Part of those revisions was due to the late-August earnings release. EPS came in at $0.76, 17 cents better than expected. Signet Jewelers have topped Wall Street’s forecasts in each of the past 10 quarters.
The last quarter marked record highs in several areas thanks to an 11% increase in total sales on top of improving margins.
Good Valuations
Shares of SIG are going for less that 12 times forward estimates, which puts the PEG ratio right at 1.0 Both metrics showing a nice price. Price-to-sales is at 1.0 as well and the stock is going for 1.6 times book value.
The Chart
SIG was pummeled in the late summer sell off, which makes plenty of sense. If consumers fear a recession the first thing to go is usually luxury purchases.
But, the earnings picture continues to improve. That has created quite a divergence and what looks like an attractive buying opportunity, even after a recent rally.
Bill Wilton is the Aggressive Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the Zacks Small Cap Trader service
