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Should Value Investors Buy Lennar (LEN) Stock?

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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, 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.

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 to watch right now is Lennar (LEN - Free Report) . LEN is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 10.10. This compares to its industry's average Forward P/E of 10.40. Over the past year, LEN's Forward P/E has been as high as 10.10 and as low as 5.77, with a median of 8.32.

Investors should also recognize that LEN has a P/B ratio of 1.22. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. LEN's current P/B looks attractive when compared to its industry's average P/B of 1.39. Over the past 12 months, LEN's P/B has been as high as 1.22 and as low as 0.84, with a median of 1.04.

Finally, investors will want to recognize that LEN has a P/CF ratio of 9.37. 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. LEN's current P/CF looks attractive when compared to its industry's average P/CF of 9.68. Within the past 12 months, LEN's P/CF has been as high as 12.04 and as low as 7.03, with a median of 8.55.

These are only a few of the key metrics included in Lennar's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, LEN looks like an impressive value stock at the moment.


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