Are Investors Undervaluing Methode (MEI) 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.
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 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 stock to keep an eye on is Methode (MEI). MEI is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 11.61. This compares to its industry's average Forward P/E of 24.28. Over the last 12 months, MEI's Forward P/E has been as high as 12.66 and as low as 6.28, with a median of 9.66.
Finally, our model also underscores that MEI has a P/CF ratio of 7.84. 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. MEI's current P/CF looks attractive when compared to its industry's average P/CF of 19.68. Over the past 52 weeks, MEI's P/CF has been as high as 9.79 and as low as 5.27, with a median of 6.90.
These are only a few of the key metrics included in Methode's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, MEI looks like an impressive value stock at the moment.
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Methode Electronics, Inc. (MEI) : Free Stock Analysis Report
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