Is TopBuild (BLD) a Great Value Stock Right Now?
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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 company value investors might notice is TopBuild (BLD). BLD is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 10.86. This compares to its industry's average Forward P/E of 11.43. Over the past year, BLD's Forward P/E has been as high as 25.73 and as low as 9.93, with a median of 17.01.
Finally, investors will want to recognize that BLD has a P/CF ratio of 11.61. 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. BLD's current P/CF looks attractive when compared to its industry's average P/CF of 14.73. Over the past year, BLD's P/CF has been as high as 24.14 and as low as 10.61, with a median of 18.68.
Another great Building Products - Miscellaneous stock you could consider is Installed Building Products (IBP), which is a # 2 (Buy) stock with a Value Score of A.
Furthermore, Installed Building Products holds a P/B ratio of 6.24 and its industry's price-to-book ratio is 169.73. IBP's P/B has been as high as 10.62, as low as 5.35, with a median of 8.50 over the past 12 months.
Value investors will likely look at more than just these metrics, but the above data helps show that TopBuild and Installed Building Products are likely undervalued currently. And when considering the strength of its earnings outlook, BLD and IBP sticks out as one of the market's strongest value stocks.
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