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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, 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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 value investors might notice is KB Home (KBH - Free Report) . KBH is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock has a Forward P/E ratio of 8.21. This compares to its industry's average Forward P/E of 9.66. Over the last 12 months, KBH's Forward P/E has been as high as 9.71 and as low as 2.68, with a median of 7.60.
Another notable valuation metric for KBH is its P/B ratio of 1.17. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. KBH's current P/B looks attractive when compared to its industry's average P/B of 1.31. Over the past year, KBH's P/B has been as high as 1.17 and as low as 0.63, with a median of 0.83.
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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. KBH has a P/S ratio of 0.63. This compares to its industry's average P/S of 0.78.
Finally, we should also recognize that KBH has a P/CF ratio of 5.78. 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. KBH's P/CF compares to its industry's average P/CF of 7.46. KBH's P/CF has been as high as 5.79 and as low as 2.80, with a median of 3.77, all within the past year.
M.D.C. may be another strong Building Products - Home Builders stock to add to your shortlist. MDC is a # 1 (Strong Buy) stock with a Value grade of A.
M.D.C. also has a P/B ratio of 1.19 compared to its industry's price-to-book ratio of 1.31. Over the past year, its P/B ratio has been as high as 1.20, as low as 0.65, with a median of 0.87.
Value investors will likely look at more than just these metrics, but the above data helps show that KB Home and M.D.C. are likely undervalued currently. And when considering the strength of its earnings outlook, KBH and MDC sticks out as one of the market's strongest value stocks.
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Is KB Home (KBH) Stock Undervalued Right Now?
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, 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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 value investors might notice is KB Home (KBH - Free Report) . KBH is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock has a Forward P/E ratio of 8.21. This compares to its industry's average Forward P/E of 9.66. Over the last 12 months, KBH's Forward P/E has been as high as 9.71 and as low as 2.68, with a median of 7.60.
Another notable valuation metric for KBH is its P/B ratio of 1.17. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. KBH's current P/B looks attractive when compared to its industry's average P/B of 1.31. Over the past year, KBH's P/B has been as high as 1.17 and as low as 0.63, with a median of 0.83.
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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. KBH has a P/S ratio of 0.63. This compares to its industry's average P/S of 0.78.
Finally, we should also recognize that KBH has a P/CF ratio of 5.78. 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. KBH's P/CF compares to its industry's average P/CF of 7.46. KBH's P/CF has been as high as 5.79 and as low as 2.80, with a median of 3.77, all within the past year.
M.D.C. may be another strong Building Products - Home Builders stock to add to your shortlist. MDC is a # 1 (Strong Buy) stock with a Value grade of A.
M.D.C. also has a P/B ratio of 1.19 compared to its industry's price-to-book ratio of 1.31. Over the past year, its P/B ratio has been as high as 1.20, as low as 0.65, with a median of 0.87.
Value investors will likely look at more than just these metrics, but the above data helps show that KB Home and M.D.C. are likely undervalued currently. And when considering the strength of its earnings outlook, KBH and MDC sticks out as one of the market's strongest value stocks.