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Should Value Investors Buy Tri Pointe Homes (TPH) Stock?
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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company to watch right now is Tri Pointe Homes (TPH - Free Report) . TPH is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock is trading with P/E ratio of 5.63 right now. For comparison, its industry sports an average P/E of 11.18. Over the past year, TPH's Forward P/E has been as high as 12.54 and as low as 3.84, with a median of 9.94.
We also note that TPH holds a PEG ratio of 0.51. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. TPH's PEG compares to its industry's average PEG of 1.14. TPH's PEG has been as high as 1.14 and as low as 0.35, with a median of 0.94, all within the past year.
Another valuation metric that we should highlight is TPH's P/B ratio of 0.58. 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 1.38. Over the past 12 months, TPH's P/B has been as high as 1.17 and as low as 0.39, with a median of 0.96.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. TPH has a P/S ratio of 0.38. This compares to its industry's average P/S of 0.39.
Finally, our model also underscores that TPH has a P/CF ratio of 5.02. 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. This stock's P/CF looks attractive against its industry's average P/CF of 9.69. TPH's P/CF has been as high as 10.23 and as low as 3.41, with a median of 8.57, all within the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Tri Pointe Homes is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, TPH feels like a great value stock at the moment.
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Should Value Investors Buy Tri Pointe Homes (TPH) Stock?
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company to watch right now is Tri Pointe Homes (TPH - Free Report) . TPH is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock is trading with P/E ratio of 5.63 right now. For comparison, its industry sports an average P/E of 11.18. Over the past year, TPH's Forward P/E has been as high as 12.54 and as low as 3.84, with a median of 9.94.
We also note that TPH holds a PEG ratio of 0.51. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. TPH's PEG compares to its industry's average PEG of 1.14. TPH's PEG has been as high as 1.14 and as low as 0.35, with a median of 0.94, all within the past year.
Another valuation metric that we should highlight is TPH's P/B ratio of 0.58. 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 1.38. Over the past 12 months, TPH's P/B has been as high as 1.17 and as low as 0.39, with a median of 0.96.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. TPH has a P/S ratio of 0.38. This compares to its industry's average P/S of 0.39.
Finally, our model also underscores that TPH has a P/CF ratio of 5.02. 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. This stock's P/CF looks attractive against its industry's average P/CF of 9.69. TPH's P/CF has been as high as 10.23 and as low as 3.41, with a median of 8.57, all within the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Tri Pointe Homes is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, TPH feels like a great value stock at the moment.