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Should Value Investors Buy Molina (MOH) 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.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One company to watch right now is Molina (MOH - Free Report) . MOH is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 13.58 right now. For comparison, its industry sports an average P/E of 17.36. Over the last 12 months, MOH's Forward P/E has been as high as 15.06 and as low as 9.07, with a median of 11.50.

Finally, our model also underscores that MOH has a P/CF ratio of 12.84. 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. MOH's current P/CF looks attractive when compared to its industry's average P/CF of 14.76. Within the past 12 months, MOH's P/CF has been as high as 14.19 and as low as 7.78, with a median of 10.09.

These are just a handful of the figures considered in Molina'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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