3. Shoe Carnival ( SCVL) is a footwear retailer, selling dress, casual and athletic shoes.

Shoe Carnival's stock has advanced 23% a year, on average, since 2008, outpacing comparable investments. It has rallied 36% in 12 months, but has corrected more than 10% in three. Of stock analysts covering Shoe Carnival, six, or 86%, advise purchasing its shares and one recommends holding them. None advocate selling. The stock has a median target of $32.75, implying 28% upside in the next 12 months. Sidoti & Co. forecasts that the stock will rise 52% to $39. BB&T rates it "buy", but predicts a more modest 9% rise to $28. The stock is still cheap.

It trades at a trailing earnings multiple of 13, a forward earnings multiple of 12, a book value multiple of 1.4 and a sales multiple of 0.5, attractive 28%, 27%, 57% and 52% discounts to specialty retail peer averages. Its PEG ratio of 0.2 reflects an 80% discount to estimated fair value. Shoe Carnival has grown earnings per share 16% a year, on average, since 2008. Its fiscal third-quarter adjusted earnings advanced 19% to 70 cents, exceeding researchers' consensus estimate by 7.4%. Sales grew 6.8%, beating consensus by 2.7%. Shoe Carnival has an 18% average earnings beat rate.

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