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5 Profitable Retail Stocks Trading Below the GF Value

Stocks to consider as Amazon begins Prime Day sales event

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James Li
Jun 21, 2021

Summary

  • Amazon kicks off Prime Day event, but other retailers also launch competing deals.
  • GuruFocus’ Screener listed several retail stocks trading below GF Value.
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In light of Amazon.com Inc. (

AMZN, Financial) kicking off its annual event for Prime members, five retail stocks with high financial strength and are undervalued as of Monday based on the GF Value line are Alibaba Group Holding Ltd. (BABA, Financial), Ollie’s Bargain Outlet Holdings Inc. (OLLI, Financial), Baozun Inc. (BZUN, Financial), Village Super Market Inc. (VLGEA, Financial) and Natural Grocers by Vitamin Cottage Inc. (NGVC, Financial) according to the All-in-One Screener, a Premium feature of GuruFocus.

Other retailers join the retail fray during Amazon’s “Prime Day” event

Other retailers like Walmart Inc. (

WMT, Financial) and Target Corp. (TGT, Financial) implemented their version of Amazon’s Prime Day event to “win eyeballs and customer loyalty” according to CNBC.

As several retailers offer “Prime Day-like” specials, investors may find opportunities in retail stocks that are trading below the GF Value line. Patterned from legendary investor Peter Lynch’s earnings line, GuruFocus’ value line considers factors ranging from historical price multiples and internal adjustments for past performance and future business growth.

Alibaba

Shares of Alibaba (

BABA, Financial) traded around $211.22, showing that the stock is significantly undervalued based on Monday’s price-to-GF Value ratio of 0.60.

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GuruFocus ranks the Chinese e-commerce giant’s financial strength 7 out of 10 on several positive investing signs, which include a strong Altman Z-score of 5.04 and interest coverage and debt ratios outperforming more than 65% of global competitors.

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Alibaba’s profitability ranks 9 out of 10 on the back of profit margins and returns outperforming more than 85% of global competitors.

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Gurus with large holdings in Alibaba include

Baillie Gifford (Trades, Portfolio), PRIMECAP Management (Trades, Portfolio) and Ken Fisher (Trades, Portfolio).

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Ollie’s Bargain Outlet Holdings

Shares of Ollie’s Bargain Outlet Holdings (

OLLI, Financial) traded around $86.11, showing that the stock is modestly undervalued based on Monday’s price-to-GF Value ratio of 0.79.

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GuruFocus ranks the Harrisburg, Pennsylvania-based company’s ' rel='nofollow' target='_blank'>financial strength 6 out of 10 on the back of ' rel='nofollow' target='_blank'>debt ratios outperforming over 74% of global competitors.

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Ollie’s Bargain Outlet’s ' rel='nofollow' target='_blank'>profitability ranks 8 out of 10 on several positive investing signs, which include a high ' rel='nofollow' target='_blank'>Piotroski F-score of 8 and an operating margin that has increased approximately 6.3% per year on average over the past five years and is outperforming more than 96% of global defensive retail competitors.

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Baozun

Shares of Baozun (

BZUN, Financial) traded around $34.51, showing the stock is significantly undervalued based on Monday’s price-to-GF Value ratio of 0.64.

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GuruFocus ranks the Shanghai-based company’s financial strength 7 out of 10 on several positive investing signs, which include a high Altman Z-score of 5.12 and cash-to-debt and debt-to-equity ratios outperforming over 65% of global competitors.

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Baozun’s profitability ranks 6 out of 10 on the back of profit margins and returns outperforming over 60% of global competitors.

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Village Super Market

Shares of Village Super Market (

VLGEA, Financial) traded around $23.32, showing that the stock is modestly undervalued based on Monday’s price-to-GF Value ratio of 0.77.

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GuruFocus ranks the Springfield, New Jersey-based company’s financial strength 6 out of 10: The company has a high Altman Z-score of 3.22 despite interest coverage and debt ratios underperforming more than 60% of global competitors.

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GuruFocus ranks Village Super Market’s profitability 6 out of 10 on the back of three-year revenue growth rates outperforming over 55% of global competitors.

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Natural Growers by Vitamin Cottage

Shares of Natural Growers by Vitamin Cottage (

NGVC, Financial) traded around $11.27, showing that the stock is modestly undervalued based on Monday’s price-to-GF Value ratio of 0.77.

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GuruFocus ranks the Lakewood, Colorado-based company’s profitability 7 out of 10 on the back of a three-year revenue growth rate outperforming more than 79% of global competitors.

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Disclosures

I am/we are Long BABA
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