Are Investors Undervaluing Magna International (MGA) 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, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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.
One company value investors might notice is Magna International (MGA). MGA is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 8.13 right now. For comparison, its industry sports an average P/E of 19.08. Over the past 52 weeks, MGA's Forward P/E has been as high as 13.10 and as low as 7.39, with a median of 9.97.
Investors should also note that MGA holds a PEG ratio of 0.41. 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. MGA's PEG compares to its industry's average PEG of 0.88. MGA's PEG has been as high as 0.83 and as low as 0.38, with a median of 0.51, all within the past year.
Another notable valuation metric for MGA is its P/B ratio of 1.30. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 2.42. Within the past 52 weeks, MGA's P/B has been as high as 1.71 and as low as 1.17, with a median of 1.40.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. MGA has a P/S ratio of 0.35. This compares to its industry's average P/S of 0.8.
If you're looking for another solid Automotive - Original Equipment value stock, take a look at Modine Manufacturing (MOD). MOD is a # 1 (Strong Buy) stock with a Value score of A.
Shares of Modine Manufacturing currently holds a Forward P/E ratio of 13.27, and its PEG ratio is 0.53. In comparison, its industry sports average P/E and PEG ratios of 19.08 and 0.88.
MOD's Forward P/E has been as high as 18.55 and as low as 7.35, with a median of 10.31. During the same time period, its PEG ratio has been as high as 0.74, as low as 0.29, with a median of 0.41.
Furthermore, Modine Manufacturing holds a P/B ratio of 3.28 and its industry's price-to-book ratio is 2.42. MOD's P/B has been as high as 3.97, as low as 1.70, with a median of 2.49 over the past 12 months.
These are only a few of the key metrics included in Magna International and Modine Manufacturing strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, MGA and MOD look like an impressive value stock at the moment.
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Magna International Inc. (MGA) : Free Stock Analysis Report
Modine Manufacturing Company (MOD) : Free Stock Analysis Report
