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Should Value Investors Buy M.D.C. (MDC) Stock?

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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.

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.

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 company value investors might notice is M.D.C. . MDC is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.

Another notable valuation metric for MDC is its P/B ratio of 0.88. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. MDC's current P/B looks attractive when compared to its industry's average P/B of 1.15. Within the past 52 weeks, MDC's P/B has been as high as 1.06 and as low as 0.65, with a median of 0.85.

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. MDC has a P/S ratio of 0.48. This compares to its industry's average P/S of 0.62.

Finally, our model also underscores that MDC has a P/CF ratio of 4.63. 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. This stock's P/CF looks attractive against its industry's average P/CF of 5.08. Within the past 12 months, MDC's P/CF has been as high as 5.14 and as low as 2.97, with a median of 3.85.

These figures are just a handful of the metrics value investors tend to look at, but they help show that M.D.C. Is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, MDC feels like a great value stock at the moment.

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