MOD or RACE: Which Is the Better Value Stock Right Now?
Investors looking for stocks in the Automotive - Original Equipment sector might want to consider either Modine (MOD) or Ferrari (RACE). But which of these two companies is the best option for those looking for undervalued stocks? 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.
Both Modine and Ferrari have a Zacks Rank of # 1 (Strong Buy) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. However, value investors will care about much more than just this.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
MOD currently has a forward P/E ratio of 15.63, while RACE has a forward P/E of 42.71. We also note that MOD has a PEG ratio of 0.63. 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. RACE currently has a PEG ratio of 2.72.
Another notable valuation metric for MOD is its P/B ratio of 3.65. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, RACE has a P/B of 20.28.
These are just a few of the metrics contributing to MOD's Value grade of B and RACE's Value grade of D.
Both MOD and RACE are impressive stocks with solid earnings outlooks, but based on these valuation figures, we 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
