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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, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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.
One stock to keep an eye on is KB Home (KBH - Free Report) . KBH is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 7.97. This compares to its industry's average Forward P/E of 9.98. Over the past year, KBH's Forward P/E has been as high as 9.59 and as low as 5.72, with a median of 7.96.
KBH is also sporting a PEG ratio of 0.72. 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. KBH's industry currently sports an average PEG of 0.74. Within the past year, KBH's PEG has been as high as 1.35 and as low as 0.66, with a median of 1.
We should also highlight that KBH has a P/B ratio of 1.29. 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 company's current P/B looks solid when compared to its industry's average P/B of 1.37. KBH's P/B has been as high as 1.39 and as low as 0.88, with a median of 1.12, over the past year.
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 prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. KBH has a P/S ratio of 0.76. This compares to its industry's average P/S of 0.91.
Finally, we should also recognize that KBH has a P/CF ratio of 8.04. 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. KBH's P/CF compares to its industry's average P/CF of 9.86. Within the past 12 months, KBH's P/CF has been as high as 8.62 and as low as 4.32, with a median of 6.
Value investors will likely look at more than just these metrics, but the above data helps show that KB Home is likely undervalued currently. And when considering the strength of its earnings outlook, KBH sticks out at as one of the market's strongest value stocks.
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Is KB Home (KBH) a Great Value Stock Right Now?
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, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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.
One stock to keep an eye on is KB Home (KBH - Free Report) . KBH is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 7.97. This compares to its industry's average Forward P/E of 9.98. Over the past year, KBH's Forward P/E has been as high as 9.59 and as low as 5.72, with a median of 7.96.
KBH is also sporting a PEG ratio of 0.72. 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. KBH's industry currently sports an average PEG of 0.74. Within the past year, KBH's PEG has been as high as 1.35 and as low as 0.66, with a median of 1.
We should also highlight that KBH has a P/B ratio of 1.29. 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 company's current P/B looks solid when compared to its industry's average P/B of 1.37. KBH's P/B has been as high as 1.39 and as low as 0.88, with a median of 1.12, over the past year.
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 prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. KBH has a P/S ratio of 0.76. This compares to its industry's average P/S of 0.91.
Finally, we should also recognize that KBH has a P/CF ratio of 8.04. 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. KBH's P/CF compares to its industry's average P/CF of 9.86. Within the past 12 months, KBH's P/CF has been as high as 8.62 and as low as 4.32, with a median of 6.
Value investors will likely look at more than just these metrics, but the above data helps show that KB Home is likely undervalued currently. And when considering the strength of its earnings outlook, KBH sticks out at as one of the market's strongest value stocks.