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Are Investors Undervaluing Lennar (LEN) Right Now?

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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.

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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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 stock to keep an eye on is Lennar (LEN). LEN is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 4.91, while its industry has an average P/E of 5.07. Over the past 52 weeks, LEN's Forward P/E has been as high as 9.84 and as low as 4.91, with a median of 7.23.

Investors should also recognize that LEN has a P/B ratio of 1.18. The P/B ratio pits a stock's market value against 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 1.22. Over the past 12 months, LEN's P/B has been as high as 1.78 and as low as 1.17, with a median of 1.56.

These are only a few of the key metrics included in Lennar's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, LEN looks like an impressive value stock at the moment.

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