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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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.
M.D.C. Holdings (MDC - Free Report) is a stock many investors are watching right now. MDC is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 8.05, which compares to its industry's average of 8.27. Over the past year, MDC's Forward P/E has been as high as 13.77 and as low as 7.82, with a median of 10.84.
Investors should also note that MDC holds a PEG ratio of 0.44. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. MDC's industry has an average PEG of 0.54 right now. Over the past 52 weeks, MDC's PEG has been as high as 1.14 and as low as 0.43, with a median of 0.73.
Investors should also recognize that MDC has a P/B ratio of 1.22. 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 1.22. MDC's P/B has been as high as 1.39 and as low as 1.06, with a median of 1.23, over the past year.
Finally, our model also underscores that MDC has a P/CF ratio of 8.83. 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 stock's P/CF looks attractive against its industry's average P/CF of 13.18. Within the past 12 months, MDC's P/CF has been as high as 13.91 and as low as 8.14, with a median of 11.04.
Value investors will likely look at more than just these metrics, but the above data helps show that M.D.C. Holdings 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.