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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 use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One stock to keep an eye on is KB Home (KBH - Free Report) . KBH is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock has a Forward P/E ratio of 7.93. This compares to its industry's average Forward P/E of 10.30. Over the last 12 months, KBH's Forward P/E has been as high as 9.59 and as low as 5.72, with a median of 7.95.
Investors will also notice that KBH has a PEG ratio of 0.72. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. KBH's PEG compares to its industry's average PEG of 0.76. Within the past year, KBH's PEG has been as high as 1.35 and as low as 0.70, with a median of 1.03.
We should also highlight that KBH has a P/B ratio of 1.26. Investors use the P/B ratio to look at a stock's market value versus 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 1.67. Over the past year, KBH's P/B has been as high as 1.38 and as low as 0.87, with a median of 1.11.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by 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 0.75. This compares to its industry's average P/S of 0.94.
Finally, we should also recognize that KBH has a P/CF ratio of 7.89. 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 company's current P/CF looks solid when compared to its industry's average P/CF of 9.55. KBH's P/CF has been as high as 8.63 and as low as 3.98, with a median of 5.77, all within the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that KB Home is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, KBH feels like a great value stock at the moment.
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Should Value Investors Buy KB Home (KBH) Stock?
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 use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One stock to keep an eye on is KB Home (KBH - Free Report) . KBH is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock has a Forward P/E ratio of 7.93. This compares to its industry's average Forward P/E of 10.30. Over the last 12 months, KBH's Forward P/E has been as high as 9.59 and as low as 5.72, with a median of 7.95.
Investors will also notice that KBH has a PEG ratio of 0.72. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. KBH's PEG compares to its industry's average PEG of 0.76. Within the past year, KBH's PEG has been as high as 1.35 and as low as 0.70, with a median of 1.03.
We should also highlight that KBH has a P/B ratio of 1.26. Investors use the P/B ratio to look at a stock's market value versus 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 1.67. Over the past year, KBH's P/B has been as high as 1.38 and as low as 0.87, with a median of 1.11.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by 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 0.75. This compares to its industry's average P/S of 0.94.
Finally, we should also recognize that KBH has a P/CF ratio of 7.89. 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 company's current P/CF looks solid when compared to its industry's average P/CF of 9.55. KBH's P/CF has been as high as 8.63 and as low as 3.98, with a median of 5.77, all within the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that KB Home is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, KBH feels like a great value stock at the moment.