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Are Investors Undervaluing These Construction Stocks Right Now?
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The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
Lennar (LEN - Free Report) is a stock many investors are watching right now. LEN is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock holds a P/E ratio of 6.87, while its industry has an average P/E of 6.93. Over the past year, LEN's Forward P/E has been as high as 10.92 and as low as 6.28, with a median of 7.68.
Finally, our model also underscores that LEN has a P/CF ratio of 7.23. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. LEN's current P/CF looks attractive when compared to its industry's average P/CF of 8.86. Over the past year, LEN's P/CF has been as high as 11.61 and as low as 6.72, with a median of 8.78.
Toll Brothers (TOL - Free Report) may be another strong Building Products - Home Builders stock to add to your shortlist. TOL is a # 1 (Strong Buy) stock with a Value grade of A.
Toll Brothers is currently trading with a Forward P/E ratio of 6.62 while its PEG ratio sits at 0.25. Both of the company's metrics compare favorably to its industry's average P/E of 6.93 and average PEG ratio of 0.47.
TOL's price-to-earnings ratio has been as high as 11.65 and as low as 6.50, with a median of 7.90, while its PEG ratio has been as high as 0.75 and as low as 0.18, with a median of 0.58, all within the past year.
Additionally, Toll Brothers has a P/B ratio of 1.51 while its industry's price-to-book ratio sits at 1.59. For TOL, this valuation metric has been as high as 1.70, as low as 1.14, with a median of 1.46 over the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Lennar and Toll Brothers are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, LEN and TOL feels like a great value stock at the moment.
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Are Investors Undervaluing These Construction Stocks Right Now?
The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
Lennar (LEN - Free Report) is a stock many investors are watching right now. LEN is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock holds a P/E ratio of 6.87, while its industry has an average P/E of 6.93. Over the past year, LEN's Forward P/E has been as high as 10.92 and as low as 6.28, with a median of 7.68.
Finally, our model also underscores that LEN has a P/CF ratio of 7.23. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. LEN's current P/CF looks attractive when compared to its industry's average P/CF of 8.86. Over the past year, LEN's P/CF has been as high as 11.61 and as low as 6.72, with a median of 8.78.
Toll Brothers (TOL - Free Report) may be another strong Building Products - Home Builders stock to add to your shortlist. TOL is a # 1 (Strong Buy) stock with a Value grade of A.
Toll Brothers is currently trading with a Forward P/E ratio of 6.62 while its PEG ratio sits at 0.25. Both of the company's metrics compare favorably to its industry's average P/E of 6.93 and average PEG ratio of 0.47.
TOL's price-to-earnings ratio has been as high as 11.65 and as low as 6.50, with a median of 7.90, while its PEG ratio has been as high as 0.75 and as low as 0.18, with a median of 0.58, all within the past year.
Additionally, Toll Brothers has a P/B ratio of 1.51 while its industry's price-to-book ratio sits at 1.59. For TOL, this valuation metric has been as high as 1.70, as low as 1.14, with a median of 1.46 over the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Lennar and Toll Brothers are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, LEN and TOL feels like a great value stock at the moment.