Are Investors Undervaluing Century Communities (CCS) Right Now?
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 value investors might notice is Century Communities (CCS). CCS is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.
Another valuation metric that we should highlight is CCS's P/B ratio of 1.25. 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. This stock's P/B looks solid versus its industry's average P/B of 1.67. Within the past 52 weeks, CCS's P/B has been as high as 1.25 and as low as 0.74, with a median of 0.97.
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. CCS has a P/S ratio of 0.79. This compares to its industry's average P/S of 0.91.
Investors could also keep in mind PulteGroup (PHM), an Building Products - Home Builders stock with a Zacks Rank of # 2 (Buy) and Value grade of A.
Shares of PulteGroup currently holds a Forward P/E ratio of 9.11, and its PEG ratio is 0.30. In comparison, its industry sports average P/E and PEG ratios of 10.43 and 0.64.
PHM's price-to-earnings ratio has been as high as 9.25 and as low as 4.50, with a median of 7.58, while its PEG ratio has been as high as 4.10 and as low as 0.21, with a median of 0.50, all within the past year.
Additionally, PulteGroup has a P/B ratio of 2.22 while its industry's price-to-book ratio sits at 1.67. For PHM, this valuation metric has been as high as 2.26, as low as 1.15, with a median of 1.65 over the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Century Communities and PulteGroup are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, CCS and PHM feels like a great value stock at the moment.
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Century Communities, Inc. (CCS) : Free Stock Analysis Report
PulteGroup, Inc. (PHM) : Free Stock Analysis Report
