Yahoo Finance Are Investors Undervaluing Forestar Group (FOR) Right Now?
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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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.
Forestar Group (FOR) is a stock many investors are watching right now. FOR is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A.
We should also highlight that FOR has a P/B ratio of 0.79. 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. FOR's current P/B looks attractive when compared to its industry's average P/B of 1.39. Over the past 12 months, FOR's P/B has been as high as 0.82 and as low as 0.43, with a median of 0.60.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. FOR has a P/S ratio of 0.82. This compares to its industry's average P/S of 1.28.
Finally, investors will want to recognize that FOR has a P/CF ratio of 7. 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 8.26. Within the past 12 months, FOR's P/CF has been as high as 7.30 and as low as 2.87, with a median of 4.33.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Forestar Group is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, FOR feels like a great value stock at the moment.
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Forestar Group Inc (FOR) : Free Stock Analysis Report
