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Are Investors Undervaluing Tri Pointe Homes (TPH) Right Now?

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The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find 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 use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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 #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 3.63. This compares to its industry's average Forward P/E of 4.64. Over the past 52 weeks, TPH's Forward P/E has been as high as 9.05 and as low as 3.59, with a median of 6.06.

We should also highlight that TPH has a P/B ratio of 0.83. 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 solid versus its industry's average P/B of 1.09. Within the past 52 weeks, TPH's P/B has been as high as 1.36 and as low as 0.81, with a median of 1.14.

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 0.52. This compares to its industry's average P/S of 0.56.

Finally, we should also recognize that TPH has a P/CF ratio of 3.89. 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 4.71. Over the past 52 weeks, TPH's P/CF has been as high as 8.39 and as low as 3.78, with a median of 5.89.

These are just a handful of the figures considered in Tri Pointe Homes'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 TPH is an impressive value stock right now.


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