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Are Investors Undervaluing Molina Healthcare (MOH) Right Now?

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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.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One company value investors might notice is Molina Healthcare (MOH - Free Report) . MOH is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 12.27 right now. For comparison, its industry sports an average P/E of 13.20. Over the past 52 weeks, MOH's Forward P/E has been as high as 14.33 and as low as 10.15, with a median of 12.40.

Investors will also notice that MOH has a PEG ratio of 1.01. 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 industry currently sports an average PEG of 1.17. Over the past 52 weeks, MOH's PEG has been as high as 1.24 and as low as 0.81, with a median of 1.

Finally, we should also recognize that MOH has a P/CF ratio of 12.57. 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 current P/CF looks attractive when compared to its industry's average P/CF of 15.22. Within the past 12 months, MOH's P/CF has been as high as 16.95 and as low as 11.03, with a median of 13.72.

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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