Are Investors Undervaluing Builders FirstSource (BLDR) Right Now?
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...
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, 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.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
Builders FirstSource (BLDR) is a stock many investors are watching right now. BLDR is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 14.15 right now. For comparison, its industry sports an average P/E of 22.29. Over the past 52 weeks, BLDR's Forward P/E has been as high as 16.57 and as low as 10.17, with a median of 12.90.
Finally, we should also recognize that BLDR has a P/CF ratio of 7.46. 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 19.42. Over the past year, BLDR's P/CF has been as high as 15.57 and as low as 5.74, with a median of 11.68.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Builders FirstSource is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, BLDR feels like a great value stock at the moment.
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