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Should Value Investors Buy Toll Brothers (TOL) Stock?
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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.
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 Toll Brothers (TOL - Free Report) . TOL is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 8.71 right now. For comparison, its industry sports an average P/E of 10.12. Over the past year, TOL's Forward P/E has been as high as 8.71 and as low as 5.64, with a median of 7.32.
Finally, we should also recognize that TOL has a P/CF ratio of 8.05. 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. TOL's P/CF compares to its industry's average P/CF of 9.51. TOL's P/CF has been as high as 8.05 and as low as 4.46, with a median of 5.31, all within the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that Toll Brothers is likely undervalued currently. And when considering the strength of its earnings outlook, TOL sticks out at as one of the market's strongest value stocks.
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Should Value Investors Buy Toll Brothers (TOL) 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.
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 Toll Brothers (TOL - Free Report) . TOL is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 8.71 right now. For comparison, its industry sports an average P/E of 10.12. Over the past year, TOL's Forward P/E has been as high as 8.71 and as low as 5.64, with a median of 7.32.
Finally, we should also recognize that TOL has a P/CF ratio of 8.05. 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. TOL's P/CF compares to its industry's average P/CF of 9.51. TOL's P/CF has been as high as 8.05 and as low as 4.46, with a median of 5.31, all within the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that Toll Brothers is likely undervalued currently. And when considering the strength of its earnings outlook, TOL sticks out at as one of the market's strongest value stocks.