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 These Construction Stocks a Great Value Stocks Right Now?
Read MoreHide Full Article
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
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.
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 #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 6.75, which compares to its industry's average of 7.37. KBH's Forward P/E has been as high as 12.05 and as low as 5.07, with a median of 7.29, all within the past year.
We also note that KBH holds a PEG ratio of 0.18. 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. KBH's industry currently sports an average PEG of 0.36. KBH's PEG has been as high as 0.69 and as low as 0.14, with a median of 0.39, all within the past year.
We should also highlight that KBH has a P/B ratio of 1.23. Investors use the P/B ratio to look at a stock's market value versus 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 1.60. Over the past 12 months, KBH's P/B has been as high as 1.71 and as low as 1.10, with a median of 1.34.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. 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 0.7. This compares to its industry's average P/S of 0.73.
Finally, our model also underscores that KBH has a P/CF ratio of 7.04. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 8.90. Within the past 12 months, KBH's P/CF has been as high as 13.29 and as low as 6.78, with a median of 9.56.
Investors could also keep in mind Lennar (LEN - Free Report) , an Building Products - Home Builders stock with a Zacks Rank of # 2 (Buy) and Value grade of A.
Shares of Lennar are currently trading at a forward earnings multiple of 7.75 and a PEG ratio of 0.33 compared to its industry's P/E and PEG ratios of 7.37 and 0.36, respectively.
LEN's Forward P/E has been as high as 10.92 and as low as 6.28, with a median of 8.55. During the same time period, its PEG ratio has been as high as 1.26, as low as 0.30, with a median of 0.99.
Additionally, Lennar has a P/B ratio of 1.62 while its industry's price-to-book ratio sits at 1.60. For LEN, this valuation metric has been as high as 1.78, as low as 1.23, with a median of 1.55 over the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that KB Home and Lennar are likely undervalued currently. And when considering the strength of its earnings outlook, KBH and LEN sticks out as one of the market's strongest value stocks.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Are These Construction Stocks a Great Value Stocks Right Now?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
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.
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 #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 6.75, which compares to its industry's average of 7.37. KBH's Forward P/E has been as high as 12.05 and as low as 5.07, with a median of 7.29, all within the past year.
We also note that KBH holds a PEG ratio of 0.18. 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. KBH's industry currently sports an average PEG of 0.36. KBH's PEG has been as high as 0.69 and as low as 0.14, with a median of 0.39, all within the past year.
We should also highlight that KBH has a P/B ratio of 1.23. Investors use the P/B ratio to look at a stock's market value versus 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 1.60. Over the past 12 months, KBH's P/B has been as high as 1.71 and as low as 1.10, with a median of 1.34.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. 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 0.7. This compares to its industry's average P/S of 0.73.
Finally, our model also underscores that KBH has a P/CF ratio of 7.04. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 8.90. Within the past 12 months, KBH's P/CF has been as high as 13.29 and as low as 6.78, with a median of 9.56.
Investors could also keep in mind Lennar (LEN - Free Report) , an Building Products - Home Builders stock with a Zacks Rank of # 2 (Buy) and Value grade of A.
Shares of Lennar are currently trading at a forward earnings multiple of 7.75 and a PEG ratio of 0.33 compared to its industry's P/E and PEG ratios of 7.37 and 0.36, respectively.
LEN's Forward P/E has been as high as 10.92 and as low as 6.28, with a median of 8.55. During the same time period, its PEG ratio has been as high as 1.26, as low as 0.30, with a median of 0.99.
Additionally, Lennar has a P/B ratio of 1.62 while its industry's price-to-book ratio sits at 1.60. For LEN, this valuation metric has been as high as 1.78, as low as 1.23, with a median of 1.55 over the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that KB Home and Lennar are likely undervalued currently. And when considering the strength of its earnings outlook, KBH and LEN sticks out as one of the market's strongest value stocks.