Back to top

Image: Bigstock

Is MI Homes (MHO) Stock Undervalued Right Now?

Read MoreHide Full Article

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.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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 MI Homes (MHO - Free Report) . MHO is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 2.96. This compares to its industry's average Forward P/E of 4.65. Over the past 52 weeks, MHO's Forward P/E has been as high as 9.28 and as low as 2.62, with a median of 4.09.

Another notable valuation metric for MHO is its P/B ratio of 0.78. 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. MHO's current P/B looks attractive when compared to its industry's average P/B of 0.92. Over the past year, MHO's P/B has been as high as 1.59 and as low as 0.68, with a median of 1.13.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. MHO has a P/S ratio of 0.38. This compares to its industry's average P/S of 0.6.

Finally, investors should note that MHO has a P/CF ratio of 3.25. 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. MHO's P/CF compares to its industry's average P/CF of 5.12. Within the past 12 months, MHO's P/CF has been as high as 7.05 and as low as 2.85, with a median of 4.71.

These are just a handful of the figures considered in MI 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 MHO is an impressive value stock right now.

In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

MI Homes, Inc. (MHO) - free report >>

Published in