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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.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One company to watch right now is MI Homes (MHO - Free Report) . MHO is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock is trading with a P/E ratio of 5.83, which compares to its industry's average of 10.31. Over the past 52 weeks, MHO's Forward P/E has been as high as 5.89 and as low as 2.12, with a median of 2.99.
We should also highlight that MHO has a P/B ratio of 0.85. The P/B ratio is used to compare a stock's market value with 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 1.01. Over the past 12 months, MHO's P/B has been as high as 0.86 and as low as 0.51, with a median of 0.69.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. 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 0.43. This compares to its industry's average P/S of 0.65.
Finally, investors should note that MHO has a P/CF ratio of 3.66. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 6.33. MHO's P/CF has been as high as 3.69 and as low as 2.08, with a median of 2.86, all within the past year.
Another great Building Products - Home Builders stock you could consider is Toll Brothers (TOL - Free Report) , which is a # 2 (Buy) stock with a Value Score of A.
Toll Brothers is trading at a forward earnings multiple of 7.63 at the moment, with a PEG ratio of 0.69. This compares to its industry's average P/E of 10.31 and average PEG ratio of 0.82.
TOL's Forward P/E has been as high as 8.14 and as low as 3.80, with a median of 5.47. During the same time period, its PEG ratio has been as high as 0.90, as low as 0.34, with a median of 0.67.
Toll Brothers also has a P/B ratio of 1.13 compared to its industry's price-to-book ratio of 1.01. Over the past year, its P/B ratio has been as high as 1.14, as low as 0.78, with a median of 1.01.
These are just a handful of the figures considered in MI Homes and Toll Brothers'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 and TOL is an impressive value stock right now.
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Should Value Investors Buy MI Homes (MHO) Stock?
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.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One company to watch right now is MI Homes (MHO - Free Report) . MHO is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock is trading with a P/E ratio of 5.83, which compares to its industry's average of 10.31. Over the past 52 weeks, MHO's Forward P/E has been as high as 5.89 and as low as 2.12, with a median of 2.99.
We should also highlight that MHO has a P/B ratio of 0.85. The P/B ratio is used to compare a stock's market value with 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 1.01. Over the past 12 months, MHO's P/B has been as high as 0.86 and as low as 0.51, with a median of 0.69.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. 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 0.43. This compares to its industry's average P/S of 0.65.
Finally, investors should note that MHO has a P/CF ratio of 3.66. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 6.33. MHO's P/CF has been as high as 3.69 and as low as 2.08, with a median of 2.86, all within the past year.
Another great Building Products - Home Builders stock you could consider is Toll Brothers (TOL - Free Report) , which is a # 2 (Buy) stock with a Value Score of A.
Toll Brothers is trading at a forward earnings multiple of 7.63 at the moment, with a PEG ratio of 0.69. This compares to its industry's average P/E of 10.31 and average PEG ratio of 0.82.
TOL's Forward P/E has been as high as 8.14 and as low as 3.80, with a median of 5.47. During the same time period, its PEG ratio has been as high as 0.90, as low as 0.34, with a median of 0.67.
Toll Brothers also has a P/B ratio of 1.13 compared to its industry's price-to-book ratio of 1.01. Over the past year, its P/B ratio has been as high as 1.14, as low as 0.78, with a median of 1.01.
These are just a handful of the figures considered in MI Homes and Toll Brothers'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 and TOL is an impressive value stock right now.