Yahoo Finance Should Value Investors Buy MI Homes (MHO) Stock?
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.
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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One stock to keep an eye on is MI Homes (MHO). MHO is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock holds a P/E ratio of 5.79, while its industry has an average P/E of 9.89. Over the last 12 months, MHO's Forward P/E has been as high as 5.89 and as low as 2.12, with a median of 3.55.
We should also highlight that MHO has a P/B ratio of 0.94. 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 company's current P/B looks solid when compared to its industry's average P/B of 1.20. Over the past 12 months, MHO's P/B has been as high as 0.94 and as low as 0.51, with a median of 0.69.
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. MHO has a P/S ratio of 0.47. This compares to its industry's average P/S of 0.71.
Finally, investors will want to recognize that MHO has a P/CF ratio of 4.01. 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. MHO's P/CF compares to its industry's average P/CF of 5.88. Over the past 52 weeks, MHO's P/CF has been as high as 4.01 and as low as 2.08, with a median of 2.86.
Investors could also keep in mind Taylor Morrison Home (TMHC), an Building Products - Home Builders stock with a Zacks Rank of # 1 (Strong Buy) and Value grade of A.
Taylor Morrison Home sports a P/B ratio of 1.02 as well; this compares to its industry's price-to-book ratio of 1.20. In the past 52 weeks, TMHC's P/B has been as high as 1.02, as low as 0.57, with a median of 0.75.
These figures are just a handful of the metrics value investors tend to look at, but they help show that MI Homes and Taylor Morrison Home are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, MHO and TMHC feels like a great value stock at the moment.
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M/I Homes, Inc. (MHO) : Free Stock Analysis Report
Taylor Morrison Home Corporation (TMHC) : Free Stock Analysis Report
