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Should Value Investors Buy Meritor (MTOR) Stock?

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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One stock to keep an eye on is Meritor . MTOR is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 6.45, which compares to its industry's average of 10.39. MTOR's Forward P/E has been as high as 11.35 and as low as 4.75, with a median of 6.66, all within the past year.

Finally, investors should note that MTOR has a P/CF ratio of 5.61. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 6.22. Within the past 12 months, MTOR's P/CF has been as high as 8.91 and as low as 4.21, with a median of 5.06.

These are only a few of the key metrics included in Meritor's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, MTOR looks like an impressive value stock at the moment.

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