Sometimes it's good to be a contrarian. And while the Motley Fool CAPS community uncovers loads of great stocks, sometimes I'll run across a high-rated stock -- or a low-rated one -- that makes me question their sentiment. Right now, my top pick among underrated stocks is The Buckle
This teen retailer has been firing on all cylinders lately, yet it's only earned a lowly two-star rating with the CAPS community. I'm not sure why it receives such lackluster community sentiment -- especially when I compare its key metrics against those of specialty retail peers with higher CAPS ratings:
Company |
CAPS Rating (Out of 5) |
P/E Ratio |
5-Year Growth Expectations (Annualized) |
Past 5 Years' Growth (Annualized) |
---|---|---|---|---|
Buckle |
** |
13 |
12.3% |
32.1% |
Guess? |
*** |
12 |
17.5% |
60.8% |
Wet Seal |
*** |
12 |
15% |
9.8% |
Limited Brands |
*** |
32 |
10.6% |
19.5% |
Data from CAPS and Yahoo! Finance as of June 29, 2009.
From a quick glance at those figures, I'd say that Guess? is the only stock of the bunch that really deserves to outpace Buckle in our community's eyes. And while I often glance at analysts' growth expectations, I'll also take them with a grain of salt. I'm particularly skeptical about projections for Wet Seal, since that company has been struggling big time for the last couple of years. Meanwhile, Limited looks absurdly overpriced given its future outlook, not to mention its even less heady past growth.
I'm not entirely convinced analysts or investors realize how strong a retailer Buckle is. Even in the midst of this nasty recession, it has joined the likes of Aeropostale
Last but not least, Buckle is also a fairly quiet retailer; you don't hear a lot of media hype about it, unlike more high-profile or controversial names such as Wal-Mart
CAPS is a great place to find stock ideas and weigh community sentiment, much of which is often right on target. The more people who play and rate stocks, the better the collective data gets. If you have an opinion on Buckle -- whether you agree it's an underrated jewel, or think the community's collective yawn sounds about right -- head over to CAPS and let us know what you think about it.
Buckle down for related Foolishness:
- Are wrecking balls about to hit the malls?
- The storm's not over for retail, so be careful what stocks you choose.
- In search of retail outliers for your portfolio.