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MOD or RACE: Which Is the Better Value Stock Right Now?

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Investors with an interest in Automotive - Original Equipment stocks have likely encountered both Modine (MOD) and Ferrari (RACE). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Currently, Modine has a Zacks Rank of #1 (Strong Buy), while Ferrari has a Zacks Rank of #3 (Hold). This means that MOD's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle for value investors.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

MOD currently has a forward P/E ratio of 11.19, while RACE has a forward P/E of 41.60. We also note that MOD has a PEG ratio of 1.12. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. RACE currently has a PEG ratio of 2.33.

Another notable valuation metric for MOD is its P/B ratio of 2.62. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, RACE has a P/B of 16.73.

These metrics, and several others, help MOD earn a Value grade of A, while RACE has been given a Value grade of D.

MOD stands above RACE thanks to its solid earnings outlook, and based on these valuation figures, we also feel that MOD is the superior value option right now.


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Modine Manufacturing Company (MOD) : Free Stock Analysis Report
 
Ferrari N.V. (RACE) : Free Stock Analysis Report
 
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