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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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One stock to keep an eye on is MI Homes (MHO - Free Report) . MHO is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 3.16 right now. For comparison, its industry sports an average P/E of 5.14. Over the past 52 weeks, MHO's Forward P/E has been as high as 9.28 and as low as 2.95, with a median of 4.35.
Another valuation metric that we should highlight is MHO's P/B ratio of 0.88. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 1.03. Over the past 12 months, MHO's P/B has been as high as 1.59 and as low as 0.82, with a median of 1.18.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. MHO has a P/S ratio of 0.38. This compares to its industry's average P/S of 0.59.
Finally, investors will want to recognize that MHO has a P/CF ratio of 3.52. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. MHO's current P/CF looks attractive when compared to its industry's average P/CF of 5.49. Within the past 12 months, MHO's P/CF has been as high as 7.05 and as low as 3.27, with a median of 4.93.
Taylor Morrison Home (TMHC - Free Report) may be another strong Building Products - Home Builders stock to add to your shortlist. TMHC is a # 2 (Buy) stock with a Value grade of A.
Taylor Morrison Home also has a P/B ratio of 0.94 compared to its industry's price-to-book ratio of 1.03. Over the past year, its P/B ratio has been as high as 1.16, as low as 0.78, with a median of 0.97.
Value investors will likely look at more than just these metrics, but the above data helps show that MI Homes and Taylor Morrison Home are likely undervalued currently. And when considering the strength of its earnings outlook, MHO and TMHC sticks out as one of the market's strongest value stocks.
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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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One stock to keep an eye on is MI Homes (MHO - Free Report) . MHO is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 3.16 right now. For comparison, its industry sports an average P/E of 5.14. Over the past 52 weeks, MHO's Forward P/E has been as high as 9.28 and as low as 2.95, with a median of 4.35.
Another valuation metric that we should highlight is MHO's P/B ratio of 0.88. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 1.03. Over the past 12 months, MHO's P/B has been as high as 1.59 and as low as 0.82, with a median of 1.18.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. MHO has a P/S ratio of 0.38. This compares to its industry's average P/S of 0.59.
Finally, investors will want to recognize that MHO has a P/CF ratio of 3.52. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. MHO's current P/CF looks attractive when compared to its industry's average P/CF of 5.49. Within the past 12 months, MHO's P/CF has been as high as 7.05 and as low as 3.27, with a median of 4.93.
Taylor Morrison Home (TMHC - Free Report) may be another strong Building Products - Home Builders stock to add to your shortlist. TMHC is a # 2 (Buy) stock with a Value grade of A.
Taylor Morrison Home also has a P/B ratio of 0.94 compared to its industry's price-to-book ratio of 1.03. Over the past year, its P/B ratio has been as high as 1.16, as low as 0.78, with a median of 0.97.
Value investors will likely look at more than just these metrics, but the above data helps show that MI Homes and Taylor Morrison Home are likely undervalued currently. And when considering the strength of its earnings outlook, MHO and TMHC sticks out as one of the market's strongest value stocks.