Yahoo Finance MOD or RACE: Which Is the Better Value Stock Right Now?
Investors interested in Automotive - Original Equipment stocks are likely familiar with Modine (MOD) and Ferrari (RACE). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Modine and Ferrari are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that MOD likely has seen a stronger improvement to its earnings outlook than RACE has recently. But this is just one piece of the puzzle for value investors.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
MOD currently has a forward P/E ratio of 23.07, while RACE has a forward P/E of 51.10. We also note that MOD has a PEG ratio of 0.68. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. RACE currently has a PEG ratio of 3.25.
Another notable valuation metric for MOD is its P/B ratio of 6.32. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, RACE has a P/B of 28.62.
These metrics, and several others, help MOD earn a Value grade of B, while RACE has been given a Value grade of C.
MOD is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that MOD is likely the superior value option right now.
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Modine Manufacturing Company (MOD) : Free Stock Analysis Report
Ferrari N.V. (RACE) : Free Stock Analysis Report
