While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
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.
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 (MOD) is a stock many investors are watching right now. MOD is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock holds a P/E ratio of 6.79, while its industry has an average P/E of 14.33. Over the past year, MOD's Forward P/E has been as high as 9.68 and as low as 4.86, with a median of 7.52.
MOD is also sporting a PEG ratio of 0.68. 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 industry has an average PEG of 1.65 right now. Over the last 12 months, MOD's PEG has been as high as 0.84 and as low as 0.49, with a median of 0.73.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. MOD has a P/S ratio of 0.18. This compares to its industry's average P/S of 0.42.
Finally, investors should note that MOD has a P/CF ratio of 4.60. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 7.78. Over the past 52 weeks, MOD's P/CF has been as high as 5.77 and as low as 3.27, with a median of 4.33.
These are just a handful of the figures considered in Modine's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that MOD is an impressive value stock right now.
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