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Is M.D.C. (MDC) Stock Undervalued Right Now?

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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One company value investors might notice is M.D.C. (MDC - Free Report) . MDC is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 6.81 right now. For comparison, its industry sports an average P/E of 7.09. Over the last 12 months, MDC's Forward P/E has been as high as 15.53 and as low as 3.90, with a median of 11.46.

We should also highlight that MDC has a P/B ratio of 0.87. 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 1.19. MDC's P/B has been as high as 1.20 and as low as 0.68, with a median of 0.91, over the past year.

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. MDC has a P/S ratio of 0.54. This compares to its industry's average P/S of 0.61.

Value investors will likely look at more than just these metrics, but the above data helps show that M.D.C. Is likely undervalued currently. And when considering the strength of its earnings outlook, MDC sticks out at as one of the market's strongest value stocks.


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