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, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
Molina Healthcare (MOH) is a stock many investors are watching right now. MOH is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 9.08 right now. For comparison, its industry sports an average P/E of 16.80. Over the past year, MOH's Forward P/E has been as high as 13.98 and as low as 6.48, with a median of 11.46.
Another valuation metric that we should highlight is MOH's P/B ratio of 2.06. 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. MOH's current P/B looks attractive when compared to its industry's average P/B of 2.46. Over the past year, MOH's P/B has been as high as 4.44 and as low as 1.79, with a median of 3.71.
Value investors also use the P/S ratio. The P/S ratio is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. MOH has a P/S ratio of 0.21. This compares to its industry's average P/S of 0.28.
Finally, our model also underscores that MOH has a P/CF ratio of 7.07. 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. This stock's P/CF looks attractive against its industry's average P/CF of 19.57. Within the past 12 months, MOH's P/CF has been as high as 16.68 and as low as 6.15, with a median of 12.60.
These are just a handful of the figures considered in Molina Healthcare's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that MOH is an impressive value stock right now.
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Molina Healthcare, Inc (MOH): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).