Yahoo Finance Should Value Investors Buy Taylor Morrison Home (TMHC) Stock?
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, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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.
Taylor Morrison Home (TMHC) is a stock many investors are watching right now. TMHC is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 7.53. This compares to its industry's average Forward P/E of 10.35. Over the past 52 weeks, TMHC's Forward P/E has been as high as 8.49 and as low as 5.14, with a median of 7.10.
Another valuation metric that we should highlight is TMHC's P/B ratio of 1.17. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. TMHC's current P/B looks attractive when compared to its industry's average P/B of 1.61. TMHC's P/B has been as high as 1.25 and as low as 0.78, with a median of 1.05, over the past year.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. TMHC has a P/S ratio of 0.84. This compares to its industry's average P/S of 0.99.
Finally, our model also underscores that TMHC has a P/CF ratio of 8.05. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. TMHC's current P/CF looks attractive when compared to its industry's average P/CF of 9.49. Over the past 52 weeks, TMHC's P/CF has been as high as 8.41 and as low as 4.23, with a median of 5.48.
Another great Building Products - Home Builders stock you could consider is Tri Pointe Homes (TPH), which is a # 1 (Strong Buy) stock with a Value Score of A.
Tri Pointe Homes is currently trading with a Forward P/E ratio of 8.43 while its PEG ratio sits at 0.65. Both of the company's metrics compare favorably to its industry's average P/E of 10.35 and average PEG ratio of 0.75.
TPH's price-to-earnings ratio has been as high as 11.01 and as low as 6.44, with a median of 9.28, while its PEG ratio has been as high as 0.87 and as low as 0.50, with a median of 0.71, all within the past year.
Furthermore, Tri Pointe Homes holds a P/B ratio of 1.24 and its industry's price-to-book ratio is 1.61. TPH's P/B has been as high as 1.26, as low as 0.81, with a median of 1.10 over the past 12 months.
These are only a few of the key metrics included in Taylor Morrison Home and Tri Pointe Homes strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, TMHC and TPH look like an impressive value stock at the moment.
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Taylor Morrison Home Corporation (TMHC) : Free Stock Analysis Report
Tri Pointe Homes Inc. (TPH) : Free Stock Analysis Report
