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MOD vs. MBLY: Which Stock Should Value Investors Buy Now?

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Investors looking for stocks in the Automotive - Original Equipment sector might want to consider either Modine (MOD - Free Report) or Mobileye Global (MBLY - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Currently, Modine has a Zacks Rank of #2 (Buy), while Mobileye Global has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that MOD likely has seen a stronger improvement to its earnings outlook than MBLY has recently. But this is only part of the picture for value investors.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.

Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

MOD currently has a forward P/E ratio of 8.26, while MBLY has a forward P/E of 66.96. We also note that MOD has a PEG ratio of 0.33. 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. MBLY currently has a PEG ratio of 3.81.

Another notable valuation metric for MOD is its P/B ratio of 2.26. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, MBLY has a P/B of 2.41.

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

MOD is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that MOD is likely the superior value option right now.


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