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Are Investors Undervaluing PulteGroup (PHM) 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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One company to watch right now is PulteGroup (PHM). PHM is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock holds a P/E ratio of 7.63, while its industry has an average P/E of 8.05. Over the past year, PHM's Forward P/E has been as high as 17.07 and as low as 7.46, with a median of 9.40.

Investors should also note that PHM holds a PEG ratio of 0.39. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. PHM's industry has an average PEG of 0.53 right now. Over the past 52 weeks, PHM's PEG has been as high as 1 and as low as 0.38, with a median of 0.50.

Finally, investors will want to recognize that PHM has a P/CF ratio of 10.32. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. PHM's P/CF compares to its industry's average P/CF of 12.75. Over the past 52 weeks, PHM's P/CF has been as high as 20.71 and as low as 9.92, with a median of 14.48.

These are just a handful of the figures considered in PulteGroup'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 PHM is an impressive value stock right now.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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