Should Value Investors Buy These Construction Stocks?
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...
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
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.
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 value investors might notice is Century Communities (CCS). CCS is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 5.22, while its industry has an average P/E of 7.36. Over the past 52 weeks, CCS's Forward P/E has been as high as 9.59 and as low as 4.22, with a median of 5.44.
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. CCS has a P/S ratio of 0.69. This compares to its industry's average P/S of 0.78.
Finally, our model also underscores that CCS has a P/CF ratio of 6.28. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 9.11. Within the past 12 months, CCS's P/CF has been as high as 10.01 and as low as 4.81, with a median of 6.64.
Another great Building Products - Home Builders stock you could consider is Taylor Morrison Home (TMHC), which is a # 2 (Buy) stock with a Value Score of A.
Additionally, Taylor Morrison Home has a P/B ratio of 1.10 while its industry's price-to-book ratio sits at 1.64. For TMHC, this valuation metric has been as high as 1.16, as low as 0.78, with a median of 1 over the past year.
These are just a handful of the figures considered in Century Communities and Taylor Morrison Home's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that CCS and TMHC is an impressive value stock right now.
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Century Communities, Inc. (CCS): Free Stock Analysis Report
Taylor Morrison Home Corporation (TMHC): Free Stock Analysis Report
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