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Should Value Investors Buy Molina (MOH) Stock?

Zacks Equity Research
·2 mins read

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

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.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One company to watch right now is Molina (MOH). MOH is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 14.72, which compares to its industry's average of 15.32. Over the past 52 weeks, MOH's Forward P/E has been as high as 15.06 and as low as 9.07, with a median of 11.50.

Finally, investors should note that MOH has a P/CF ratio of 14.12. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. MOH's current P/CF looks attractive when compared to its industry's average P/CF of 14.45. Over the past year, MOH's P/CF has been as high as 14.19 and as low as 7.78, with a median of 10.13.

These are only a few of the key metrics included in Molina'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, MOH looks like an impressive value stock at the moment.


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