Is M/I Homes (MHO) Stock Undervalued Right Now?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
M/I Homes (MHO) is a stock many investors are watching right now. MHO is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock is trading with P/E ratio of 4.48 right now. For comparison, its industry sports an average P/E of 7.76. Over the past 52 weeks, MHO's Forward P/E has been as high as 9.28 and as low as 4.24, with a median of 6.79.
We should also highlight that MHO has a P/B ratio of 1.30. 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 1.64. Within the past 52 weeks, MHO's P/B has been as high as 1.59 and as low as 0.99, with a median of 1.18.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's 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. MHO has a P/S ratio of 0.53. This compares to its industry's average P/S of 0.83.
Finally, investors should note that MHO has a P/CF ratio of 5.40. 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. This stock's P/CF looks attractive against its industry's average P/CF of 8.56. Within the past 12 months, MHO's P/CF has been as high as 7.36 and as low as 4.48, with a median of 5.95.
Value investors will likely look at more than just these metrics, but the above data helps show that M/I Homes is likely undervalued currently. And when considering the strength of its earnings outlook, MHO sticks out at as one of the market's strongest value stocks.
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