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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. 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 Lennar (LEN - Free Report) . LEN is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 9.99, which compares to its industry's average of 10.64. LEN's Forward P/E has been as high as 10.44 and as low as 5.77, with a median of 8.76, all within the past year.
Investors should also note that LEN holds a PEG ratio of 1.11. 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. LEN's PEG compares to its industry's average PEG of 1.15. Over the last 12 months, LEN's PEG has been as high as 1.19 and as low as 0.34, with a median of 0.65.
Another valuation metric that we should highlight is LEN's 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 1.40. Within the past 52 weeks, LEN's P/B has been as high as 1.27 and as low as 0.84, with a median of 1.07.
Finally, we should also recognize that LEN has a P/CF ratio of 9.33. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 9.83. Within the past 12 months, LEN's P/CF has been as high as 11.20 and as low as 7.03, with a median of 8.49.
Value investors will likely look at more than just these metrics, but the above data helps show that Lennar is likely undervalued currently. And when considering the strength of its earnings outlook, LEN sticks out at as one of the market's strongest value stocks.