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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. 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 Landsea Homes (LSEA). LSEA is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 6.69, which compares to its industry's average of 9.37. Over the last 12 months, LSEA's Forward P/E has been as high as 6.83 and as low as 1.72, with a median of 3.50.
Finally, investors will want to recognize that LSEA has a P/CF ratio of 4.18. 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 5.66. Within the past 12 months, LSEA's P/CF has been as high as 4.53 and as low as 1.97, with a median of 3.39.
If you're looking for another solid Building Products - Home Builders value stock, take a look at Taylor Morrison Home (TMHC). TMHC is a # 2 (Buy) stock with a Value score of A.
Additionally, Taylor Morrison Home has a P/B ratio of 0.97 while its industry's price-to-book ratio sits at 1.23. For TMHC, this valuation metric has been as high as 1.02, as low as 0.57, with a median of 0.75 over the past year.
These are just a handful of the figures considered in Landsea Homes and Taylor Morrison Home's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that LSEA and TMHC is an impressive value stock right now.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report