Are Investors Undervaluing Builders FirstSource (BLDR) 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.
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.
One stock to keep an eye on is Builders FirstSource (BLDR). BLDR is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 8.84, which compares to its industry's average of 15.84. Over the last 12 months, BLDR's Forward P/E has been as high as 14.88 and as low as 3.62, with a median of 11.62.
Finally, investors will want to recognize that BLDR has a P/CF ratio of 6.25. 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. BLDR's P/CF compares to its industry's average P/CF of 12.15. Over the past 52 weeks, BLDR's P/CF has been as high as 8.09 and as low as 2.67, with a median of 4.51.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Builders FirstSource is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, BLDR feels like a great value stock at the moment.
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Builders FirstSource, Inc. (BLDR) : Free Stock Analysis Report
