Are Investors Undervaluing PulteGroup (PHM) Right Now?
The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find 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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 stock to keep an eye on is PulteGroup (PHM). PHM 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 11.28, while its industry has an average P/E of 11.32. Over the last 12 months, PHM's Forward P/E has been as high as 12.02 and as low as 8.01, with a median of 9.41.
We also note that PHM holds a PEG ratio of 1.09. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. PHM's industry has an average PEG of 1.16 right now. Over the last 12 months, PHM's PEG has been as high as 1.51 and as low as 1.03, with a median of 1.29.
Value investors will likely look at more than just these metrics, but the above data helps show that PulteGroup is likely undervalued currently. And when considering the strength of its earnings outlook, PHM sticks out at as one of the market's strongest value stocks.
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