Is Modine Manufacturing (MOD) Stock Undervalued Right Now?
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.
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 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.
Modine Manufacturing (MOD) is a stock many investors are watching right now. MOD is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 9.88 right now. For comparison, its industry sports an average P/E of 19.38. MOD's Forward P/E has been as high as 10.13 and as low as 4.54, with a median of 6.60, all within the past year.
We also note that MOD holds a PEG ratio of 0.40. 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. MOD's PEG compares to its industry's average PEG of 1.01. MOD's PEG has been as high as 0.76 and as low as 0.27, with a median of 0.35, all within the past year.
Another valuation metric that we should highlight is MOD's P/B ratio of 2.40. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 4.23. Over the past 12 months, MOD's P/B has been as high as 2.45 and as low as 0.87, with a median of 1.31.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. 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 0.48. This compares to its industry's average P/S of 0.76.
These are only a few of the key metrics included in Modine Manufacturing'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, MOD looks like an impressive value stock at the moment.
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