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Are Investors Undervaluing Molina (MOH) Right Now?

Zacks Equity Research
Qualcomm (QCOM) closed the most recent trading day at $56.83, moving +0.41% from the previous trading session.

While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

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.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One stock to keep an eye on is Molina (MOH). MOH is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock holds a P/E ratio of 14.71, while its industry has an average P/E of 16.92. Over the past year, MOH's Forward P/E has been as high as 26.16 and as low as 11.52, with a median of 19.62.

Investors will also notice that MOH has a PEG ratio of 1.18. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. MOH's PEG compares to its industry's average PEG of 1.26. Over the last 12 months, MOH's PEG has been as high as 1.71 and as low as 0.81, with a median of 1.32.

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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