Investors interested in Automotive - Original Equipment stocks are likely familiar with Valeo S.A. (VLEEY) and Modine (MOD). 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Right now, Valeo S.A. is sporting a Zacks Rank of #2 (Buy), while Modine has a Zacks Rank of #5 (Strong Sell). Investors should feel comfortable knowing that VLEEY likely has seen a stronger improvement to its earnings outlook than MOD has recently. However, value investors will care about much more than just this.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its 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.
VLEEY currently has a forward P/E ratio of 9.19, while MOD has a forward P/E of 28.86. We also note that VLEEY has a PEG ratio of 0.16. 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. MOD currently has a PEG ratio of 0.85.
Another notable valuation metric for VLEEY is its P/B ratio of 0.57. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, MOD has a P/B of 7.39.
Based on these metrics and many more, VLEEY holds a Value grade of A, while MOD has a Value grade of D.
VLEEY sticks out from MOD in both our Zacks Rank and Style Scores models, so value investors will likely feel that VLEEY is the better option right now.
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>Valeo S.A. (VLEEY) : Free Stock Analysis Report
Modine Manufacturing Company (MOD) : Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
