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Should Value Investors Buy Tri Pointe Homes (TPH) Stock?
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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One company to watch right now is Tri Pointe Homes (TPH - Free Report) . TPH is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock is trading with a P/E ratio of 8.12, which compares to its industry's average of 9.88. Over the past 52 weeks, TPH's Forward P/E has been as high as 11.01 and as low as 6.44, with a median of 9.28.
Investors should also note that TPH holds a PEG ratio of 0.62. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. TPH's PEG compares to its industry's average PEG of 0.79. Over the last 12 months, TPH's PEG has been as high as 0.87 and as low as 0.50, with a median of 0.71.
Another valuation metric that we should highlight is TPH's P/B ratio of 1.19. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. TPH's current P/B looks attractive when compared to its industry's average P/B of 1.65. TPH's P/B has been as high as 1.26 and as low as 0.81, with a median of 1.10, over the past year.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by 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. TPH has a P/S ratio of 0.95. This compares to its industry's average P/S of 0.96.
Finally, we should also recognize that TPH has a P/CF ratio of 8.79. 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. This stock's P/CF looks attractive against its industry's average P/CF of 9.09. TPH's P/CF has been as high as 9.65 and as low as 4.81, with a median of 6.36, all within the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that Tri Pointe Homes is likely undervalued currently. And when considering the strength of its earnings outlook, TPH sticks out at as one of the market's strongest value stocks.
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Should Value Investors Buy Tri Pointe Homes (TPH) Stock?
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One company to watch right now is Tri Pointe Homes (TPH - Free Report) . TPH is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock is trading with a P/E ratio of 8.12, which compares to its industry's average of 9.88. Over the past 52 weeks, TPH's Forward P/E has been as high as 11.01 and as low as 6.44, with a median of 9.28.
Investors should also note that TPH holds a PEG ratio of 0.62. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. TPH's PEG compares to its industry's average PEG of 0.79. Over the last 12 months, TPH's PEG has been as high as 0.87 and as low as 0.50, with a median of 0.71.
Another valuation metric that we should highlight is TPH's P/B ratio of 1.19. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. TPH's current P/B looks attractive when compared to its industry's average P/B of 1.65. TPH's P/B has been as high as 1.26 and as low as 0.81, with a median of 1.10, over the past year.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by 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. TPH has a P/S ratio of 0.95. This compares to its industry's average P/S of 0.96.
Finally, we should also recognize that TPH has a P/CF ratio of 8.79. 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. This stock's P/CF looks attractive against its industry's average P/CF of 9.09. TPH's P/CF has been as high as 9.65 and as low as 4.81, with a median of 6.36, all within the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that Tri Pointe Homes is likely undervalued currently. And when considering the strength of its earnings outlook, TPH sticks out at as one of the market's strongest value stocks.