Is Century Communities (CCS) Stock Undervalued Right Now?
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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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.
One company to watch right now is Century Communities (CCS). CCS is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock holds a P/E ratio of 5.58, while its industry has an average P/E of 7.92. CCS's Forward P/E has been as high as 9.93 and as low as 4.80, with a median of 7.40, all within the past year.
Another notable valuation metric for CCS is its P/B ratio of 1.68. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 1.70. Over the past year, CCS's P/B has been as high as 2.01 and as low as 1.05, with a median of 1.32.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. CCS has a P/S ratio of 0.61. This compares to its industry's average P/S of 0.83.
Finally, investors should note that CCS has a P/CF ratio of 7.87. 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 stock's P/CF looks attractive against its industry's average P/CF of 8.47. CCS's P/CF has been as high as 10.01 and as low as 6.45, with a median of 8.05, all within the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that Century Communities is likely undervalued currently. And when considering the strength of its earnings outlook, CCS sticks out at as one of the market's strongest value stocks.
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