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Should Value Investors Buy Modine Manufacturing (MOD) Stock?

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.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. 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.

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 holds a P/E ratio of 6.87, while its industry has an average P/E of 17.41. 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.

Investors should also recognize that MOD has a P/B ratio of 1.57. Investors use the P/B ratio to look at a stock's market value versus 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 3.08. 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 prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. MOD has a P/S ratio of 0.35. This compares to its industry's average P/S of 0.69.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Modine Manufacturing is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, MOD feels like a great value stock at the moment.


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