Are Investors Undervaluing Meritor (MTOR) Right Now?
The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
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.
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.
Meritor (MTOR) is a stock many investors are watching right now. MTOR is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 10.57 right now. For comparison, its industry sports an average P/E of 13.92. MTOR's Forward P/E has been as high as 14.81 and as low as 4.17, with a median of 7.60, all within the past year.
Finally, we should also recognize that MTOR has a P/CF ratio of 2.85. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. MTOR's current P/CF looks attractive when compared to its industry's average P/CF of 7.78. Within the past 12 months, MTOR's P/CF has been as high as 6.53 and as low as 1.85, with a median of 4.60.
These are just a handful of the figures considered in Meritor'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 MTOR is an impressive value stock right now.
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