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Should Value Investors Buy Molina (MOH) Stock?

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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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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.

One company value investors might notice is Molina (MOH - Free Report) . MOH is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock is trading with P/E ratio of 12.60 right now. For comparison, its industry sports an average P/E of 15.88. Over the past year, MOH's Forward P/E has been as high as 26.16 and as low as 11.43, with a median of 14.47.

Investors should also note that MOH holds a PEG ratio of 0.96. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. MOH's PEG compares to its industry's average PEG of 1.18. MOH's PEG has been as high as 1.71 and as low as 0.91, with a median of 1.18, all within the past year.

Finally, we should also recognize that MOH has a P/CF ratio of 10.36. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. MOH's P/CF compares to its industry's average P/CF of 14.57. Over the past year, MOH's P/CF has been as high as 67.91 and as low as 8.43, with a median of 11.39.

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


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