Are Investors Undervaluing Installed Building Products (IBP) Right Now?
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, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company value investors might notice is Installed Building Products (IBP). IBP is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock is trading with a P/E ratio of 12.07, which compares to its industry's average of 13.27. Over the past 52 weeks, IBP's Forward P/E has been as high as 17.45 and as low as 9.34, with a median of 13.63.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by 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. IBP has a P/S ratio of 1.27. This compares to its industry's average P/S of 1.45.
Finally, we should also recognize that IBP has a P/CF ratio of 9.52. 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. IBP's P/CF compares to its industry's average P/CF of 16.94. IBP's P/CF has been as high as 12.24 and as low as 7.09, with a median of 9.07, all within the past year.
Gibraltar Industries (ROCK) may be another strong Building Products - Miscellaneous stock to add to your shortlist. ROCK is a # 2 (Buy) stock with a Value grade of A.
Gibraltar Industries also has a P/B ratio of 2.30 compared to its industry's price-to-book ratio of 3.90. Over the past year, its P/B ratio has been as high as 2.73, as low as 1.65, with a median of 2.
These are just a handful of the figures considered in Installed Building Products and Gibraltar Industries's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that IBP and ROCK is an impressive value stock right now.
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Installed Building Products, Inc. (IBP) : Free Stock Analysis Report
Gibraltar Industries, Inc. (ROCK) : Free Stock Analysis Report
