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Are Investors Undervaluing Modine (MOD) Right Now?

Zacks Equity Research

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.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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 stock to keep an eye on is Modine (MOD). MOD is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. MOD has a P/S ratio of 0.1. This compares to its industry's average P/S of 0.27.

Finally, our model also underscores that MOD has a P/CF ratio of 2.34. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 7.78. Within the past 12 months, MOD's P/CF has been as high as 5.77 and as low as 1.73, with a median of 4.23.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Modine is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, MOD feels like a great value stock at the moment.


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