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Is MI Homes (MHO) Stock Undervalued Right Now?

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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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.

One stock to keep an eye on is MI Homes (MHO). MHO is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock holds a P/E ratio of 5.70, while its industry has an average P/E of 9.73. Over the last 12 months, MHO's Forward P/E has been as high as 5.89 and as low as 2.12, with a median of 3.73.

We should also highlight that MHO has a P/B ratio of 0.93. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. MHO's current P/B looks attractive when compared to its industry's average P/B of 1.28. MHO's P/B has been as high as 0.94 and as low as 0.51, with a median of 0.69, over the past year.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. MHO has a P/S ratio of 0.49. This compares to its industry's average P/S of 0.75.

Finally, we should also recognize that MHO has a P/CF ratio of 3.96. 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 company's current P/CF looks solid when compared to its industry's average P/CF of 5.88. Over the past year, MHO's P/CF has been as high as 4.01 and as low as 2.08, with a median of 2.86.

If you're looking for another solid Building Products - Home Builders value stock, take a look at Tri Pointe Homes (TPH). TPH is a # 2 (Buy) stock with a Value score of A.

Tri Pointe Homes is trading at a forward earnings multiple of 9.42 at the moment, with a PEG ratio of 0.72. This compares to its industry's average P/E of 9.73 and average PEG ratio of 0.78.

TPH's Forward P/E has been as high as 9.51 and as low as 2.67, with a median of 6.06. During the same time period, its PEG ratio has been as high as 0.73, as low as 0.48, with a median of 0.63.

Tri Pointe Homes also has a P/B ratio of 1.08 compared to its industry's price-to-book ratio of 1.28. Over the past year, its P/B ratio has been as high as 1.09, as low as 0.57, with a median of 0.75.

Value investors will likely look at more than just these metrics, but the above data helps show that MI Homes and Tri Pointe Homes are likely undervalued currently. And when considering the strength of its earnings outlook, MHO and TPH sticks out as one of the market's strongest value stocks.

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Tri Pointe Homes Inc. (TPH) : Free Stock Analysis Report

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