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Should Value Investors Buy MI Homes (MHO) Stock?

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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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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 value investors might notice is MI Homes (MHO - Free Report) . MHO is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 7.24, which compares to its industry's average of 11.10. Over the last 12 months, MHO's Forward P/E has been as high as 8.92 and as low as 4.18, with a median of 6.92.

We should also highlight that MHO has a P/B ratio of 1.50. The P/B is a method of comparing a stock's market value to 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 1.84. Over the past 12 months, MHO's P/B has been as high as 1.70 and as low as 0.86, with a median of 1.30.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. MHO has a P/S ratio of 0.98. This compares to its industry's average P/S of 1.01.

Finally, investors will want to recognize that MHO has a P/CF ratio of 7.78. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. MHO's P/CF compares to its industry's average P/CF of 10.17. Over the past 52 weeks, MHO's P/CF has been as high as 8.79 and as low as 4.26, with a median of 6.89.

These are just a handful of the figures considered in MI Homes's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that MHO is an impressive value stock right now.


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