We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Are Investors Undervaluing Tri Pointe Homes (TPH) Right Now?
Read MoreHide Full Article
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.
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 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 has a Forward P/E ratio of 9.58. This compares to its industry's average Forward P/E of 11.11. TPH's Forward P/E has been as high as 12.90 and as low as 3.84, with a median of 10.37, all within the past year.
We also note that TPH holds a PEG ratio of 0.86. 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 2.21. Over the last 12 months, TPH's PEG has been as high as 1.14 and as low as 0.35, with a median of 0.93.
Another valuation metric that we should highlight is TPH's P/B ratio of 1. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 1.27. Over the past year, TPH's P/B has been as high as 1.17 and as low as 0.39, with a median of 0.97.
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. TPH has a P/S ratio of 0.69. This compares to its industry's average P/S of 0.73.
Finally, we should also recognize that TPH has a P/CF ratio of 6.96. 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. TPH's P/CF compares to its industry's average P/CF of 8.76. Within the past 12 months, TPH's P/CF has been as high as 10.23 and as low as 3.41, with a median of 8.56.
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.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Are Investors Undervaluing Tri Pointe Homes (TPH) Right Now?
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.
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 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 has a Forward P/E ratio of 9.58. This compares to its industry's average Forward P/E of 11.11. TPH's Forward P/E has been as high as 12.90 and as low as 3.84, with a median of 10.37, all within the past year.
We also note that TPH holds a PEG ratio of 0.86. 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 2.21. Over the last 12 months, TPH's PEG has been as high as 1.14 and as low as 0.35, with a median of 0.93.
Another valuation metric that we should highlight is TPH's P/B ratio of 1. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 1.27. Over the past year, TPH's P/B has been as high as 1.17 and as low as 0.39, with a median of 0.97.
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. TPH has a P/S ratio of 0.69. This compares to its industry's average P/S of 0.73.
Finally, we should also recognize that TPH has a P/CF ratio of 6.96. 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. TPH's P/CF compares to its industry's average P/CF of 8.76. Within the past 12 months, TPH's P/CF has been as high as 10.23 and as low as 3.41, with a median of 8.56.
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.