Are Investors Undervaluing TopBuild (BLD) 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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 company value investors might notice is TopBuild (BLD). BLD is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 14.55. This compares to its industry's average Forward P/E of 14.68. Over the past year, BLD's Forward P/E has been as high as 17.76 and as low as 9.35, with a median of 13.47.
Finally, we should also recognize that BLD has a P/CF ratio of 12.65. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. BLD's current P/CF looks attractive when compared to its industry's average P/CF of 18.95. Over the past year, BLD's P/CF has been as high as 13.16 and as low as 7.30, with a median of 9.79.
Investors could also keep in mind Construction Partners (ROAD), an Building Products - Miscellaneous stock with a Zacks Rank of # 1 (Strong Buy) and Value grade of A.
Shares of Construction Partners currently holds a Forward P/E ratio of 32.91, and its PEG ratio is 0.96. In comparison, its industry sports average P/E and PEG ratios of 14.68 and 1.24.
ROAD's price-to-earnings ratio has been as high as 46.41 and as low as 29.25, with a median of 33.86, while its PEG ratio has been as high as 1.17 and as low as 0.61, with a median of 0.95, all within the past year.
Construction Partners also has a P/B ratio of 4.60 compared to its industry's price-to-book ratio of 64.49. Over the past year, its P/B ratio has been as high as 4.75, as low as 2.84, with a median of 3.31.
These figures are just a handful of the metrics value investors tend to look at, but they help show that TopBuild and Construction Partners are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, BLD and ROAD feels like a great value stock at the moment.
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TopBuild Corp. (BLD) : Free Stock Analysis Report
Construction Partners, Inc. (ROAD) : Free Stock Analysis Report
