We look at Fossil Group, Inc. [stckqut]FOSL[/stckqut] a company in the Consumer Goods industry which traders have been highly interested in of late, to assess if it provides value for investors considering buying or selling it.
The stock has an estimated 5 year annual growth of 10.31% and a PEG multiple of 1.15.
Rather than the usual Price to Earnings (P/E) multiple method, we use a slightly different method to assess if Fossil Group, Inc. is potentially a value buy for investors, the PEG ratio (P/E to growth). This PEG multiple takes into account the expected long term growth in earnings of the company rather than merely the growth for one earnings period ahead as forward P/E does.
That is to say, P/E simply doesn’t account for the long term prospects of FOSL. As a rule of thumb, a stock with a PEG of between 0 and 1 is usually considered to be underpriced, between 1 and 2 to be at fair value and over 2 to be overpriced. Based on the PEG ratio of FOSL being 1.15, we consider Fossil Group, Inc. to likely be priced at fair value.