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Should Value Investors Buy These Construction Stocks?
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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, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 stock to keep an eye on is Landsea Homes (LSEA - Free Report) . LSEA 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 3.68. This compares to its industry's average Forward P/E of 5.48. LSEA's Forward P/E has been as high as 9.16 and as low as 2.62, with a median of 6.04, all within the past year.
We should also highlight that LSEA has a P/B ratio of 0.71. 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. LSEA's current P/B looks attractive when compared to its industry's average P/B of 1.16. Over the past 12 months, LSEA's P/B has been as high as 8.48 and as low as 0.50, with a median of 0.70.
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. LSEA has a P/S ratio of 0.41. This compares to its industry's average P/S of 0.62.
Investors could also keep in mind Taylor Morrison Home (TMHC - Free Report) , an Building Products - Home Builders stock with a Zacks Rank of # 2 (Buy) and Value grade of A.
Taylor Morrison Home sports a P/B ratio of 0.98 as well; this compares to its industry's price-to-book ratio of 1.16. In the past 52 weeks, TMHC's P/B has been as high as 1.16, as low as 0.78, with a median of 0.97.
These are just a handful of the figures considered in Landsea Homes and Taylor Morrison Home'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 LSEA and TMHC is an impressive value stock right now.
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Should Value Investors Buy These Construction Stocks?
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, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 stock to keep an eye on is Landsea Homes (LSEA - Free Report) . LSEA 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 3.68. This compares to its industry's average Forward P/E of 5.48. LSEA's Forward P/E has been as high as 9.16 and as low as 2.62, with a median of 6.04, all within the past year.
We should also highlight that LSEA has a P/B ratio of 0.71. 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. LSEA's current P/B looks attractive when compared to its industry's average P/B of 1.16. Over the past 12 months, LSEA's P/B has been as high as 8.48 and as low as 0.50, with a median of 0.70.
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. LSEA has a P/S ratio of 0.41. This compares to its industry's average P/S of 0.62.
Investors could also keep in mind Taylor Morrison Home (TMHC - Free Report) , an Building Products - Home Builders stock with a Zacks Rank of # 2 (Buy) and Value grade of A.
Taylor Morrison Home sports a P/B ratio of 0.98 as well; this compares to its industry's price-to-book ratio of 1.16. In the past 52 weeks, TMHC's P/B has been as high as 1.16, as low as 0.78, with a median of 0.97.
These are just a handful of the figures considered in Landsea Homes and Taylor Morrison Home'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 LSEA and TMHC is an impressive value stock right now.