Yahoo Finance Should Value Investors Buy PulteGroup (PHM) Stock?
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 use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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.
PulteGroup (PHM) is a stock many investors are watching right now. PHM is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 8.77, which compares to its industry's average of 9.83. Over the last 12 months, PHM's Forward P/E has been as high as 10.07 and as low as 6.02, with a median of 8.13.
We also note that PHM holds a PEG ratio of 0.50. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. PHM's industry currently sports an average PEG of 0.73. Over the last 12 months, PHM's PEG has been as high as 0.80 and as low as 0.21, with a median of 0.53.
Finally, our model also underscores that PHM has a P/CF ratio of 8.54. 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. PHM's P/CF compares to its industry's average P/CF of 9.14. Within the past 12 months, PHM's P/CF has been as high as 9.70 and as low as 4.94, with a median of 6.46.
Value investors will likely look at more than just these metrics, but the above data helps show that PulteGroup is likely undervalued currently. And when considering the strength of its earnings outlook, PHM sticks out at as one of the market's strongest value stocks.
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PulteGroup, Inc. (PHM) : Free Stock Analysis Report
