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MOD vs. OSK: Which Stock Is the Better Value Option?

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Investors interested in stocks from the Automotive - Original Equipment sector have probably already heard of Modine (MOD - Free Report) and Oshkosh (OSK - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Modine and Oshkosh are sporting Zacks Ranks of #2 (Buy) and #4 (Sell), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that MOD has an improving earnings outlook. But this is just one piece of the puzzle for value investors.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

MOD currently has a forward P/E ratio of 3.35, while OSK has a forward P/E of 12.11. We also note that MOD has a PEG ratio of 0.34. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. OSK currently has a PEG ratio of 1.37.

Another notable valuation metric for MOD is its P/B ratio of 0.37. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, OSK has a P/B of 1.58.

These are just a few of the metrics contributing to MOD's Value grade of A and OSK's Value grade of C.

MOD stands above OSK thanks to its solid earnings outlook, and based on these valuation figures, we also feel that MOD is the superior value option right now.


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