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Are Investors Undervaluing Modine Manufacturing (MOD) Right Now?

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore 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 use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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.

Modine Manufacturing (MOD) is a stock many investors are watching right now. MOD is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 7.90 right now. For comparison, its industry sports an average P/E of 19.89. Over the past year, MOD's Forward P/E has been as high as 9.19 and as low as 4.54, with a median of 6.48.

We should also highlight that MOD has a P/B ratio of 1.77. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. MOD's current P/B looks attractive when compared to its industry's average P/B of 3.33. MOD's P/B has been as high as 2.02 and as low as 0.87, with a median of 1.31, over the past year.

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 0.37. This compares to its industry's average P/S of 0.74.

Value investors will likely look at more than just these metrics, but the above data helps show that Modine Manufacturing is likely undervalued currently. And when considering the strength of its earnings outlook, MOD sticks out at as one of the market's strongest value stocks.


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