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Are Investors Undervaluing Methode (MEI) Right Now?

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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 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.

One company to watch right now is Methode (MEI - Free Report) . MEI is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 8.62, which compares to its industry's average of 22.24. Over the last 12 months, MEI's Forward P/E has been as high as 14.43 and as low as 6.64, with a median of 12.

We also note that MEI holds a PEG ratio of 0.85. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. MEI's PEG compares to its industry's average PEG of 2. Within the past year, MEI's PEG has been as high as 0.96 and as low as 0.81, with a median of 0.85.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. MEI has a P/S ratio of 1.1. This compares to its industry's average P/S of 1.24.

Finally, investors should note that MEI has a P/CF ratio of 7.77. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 18.35. Within the past 12 months, MEI's P/CF has been as high as 25.62 and as low as 6.71, with a median of 15.60.

Value investors will likely look at more than just these metrics, but the above data helps show that Methode is likely undervalued currently. And when considering the strength of its earnings outlook, MEI sticks out at as one of the market's strongest value stocks.


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