Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put Atlas Air Worldwide Holdings, Inc. stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:
PE Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, Atlas Air Worldwide has a trailing twelve months PE ratio of 5.2, as you can see in the chart below:
Image Source: Zacks Investment Research
This level actually compares pretty favorably with the market at large, as the PE for the S&P 500 stands at about 25.7. If we focus on the long-term PE trend, Atlas Air Worldwide’s current PE level puts it below its midpoint over the past five years.
Image Source: Zacks Investment Research
Further, the stock’s PE also compares favorably with its industry’s trailing twelve months PE ratio, which stands at 17.7. At the very least, this indicates that the stock is relatively undervalued right now, compared to its peers.
Image Source: Zacks Investment Research
We should also point out that Atlas Air Worldwide has a forward PE ratio (price relative to this year’s earnings) of just 4.9, so it is fair to say that a slightly more value-oriented path may be ahead for Atlas Air Worldwide stock in the near term too.
P/S Ratio
Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.
Right now, Atlas Air Worldwide has a P/S ratio of about 0.6. This is a lower than the S&P 500 average, which comes in at 5.1 right now. However, we can see in the chart below, this is slightly above the highs for this stock in particular over the past few years.
Image Source: Zacks Investment Research
If anything, this suggests some level of undervalued trading—at least compared to historical norms.
Broad Value Outlook
In aggregate, Atlas Air Worldwide currently has a Value Score of A, putting it into the top 20% of all stocks we cover from this look. This makes Atlas Air Worldwide a solid choice for value investors, and some of its other key metrics make this pretty clear too.
For example, the P/CF ratio (another great indicator of value) comes in at 2.9, which is far better than the industry average of 7.6. Clearly, AAWW is a solid choice on the value front from multiple angles.
What About the Stock Overall?
Though Atlas Air Worldwide might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth Score of B and a Momentum Score of C. This gives AAWW a Zacks VGM score — or its overarching fundamental grade — of A. (You can read more about the Zacks Style Scores here >>)
Meanwhile, the company’s recent earnings estimates have been robust at best. The current quarter has seen two estimates go higher in the past sixty days compared to none lower, while the full year estimate has seen three up and none down in the same time period.
This has had a noticeable impact on the consensus estimate though as the current quarter consensus estimate has increased by 36% in the past two months, while the full year estimate has improved by 20.6%. You can see the consensus estimate trend and recent price action for the stock in the chart below:
This bullish trend is why the stock has a Zacks Rank #2 (Buy) and why we are expecting outperformance from the company in the near term.
Bottom Line
Atlas Air Worldwide is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. Boasting a solid industry rank (top 45%) and a top Zacks Rank, the company deserves attention right now. However, over the past two years, the Zacks Transportation - Air Freight and Cargo industry has underperformed the broader market, as you can see below:
Image Source: Zacks Investment Research
Nonetheless, it might pay for value investors to delve deeper into the company’s prospects, as fundamentals indicate that this stock could be a compelling pick.
Image: Shutterstock
Is Atlas Air Worldwide (AAWW) a Great Value Stock Right Now?
Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put Atlas Air Worldwide Holdings, Inc. stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:
PE Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, Atlas Air Worldwide has a trailing twelve months PE ratio of 5.2, as you can see in the chart below:
Image Source: Zacks Investment Research
This level actually compares pretty favorably with the market at large, as the PE for the S&P 500 stands at about 25.7. If we focus on the long-term PE trend, Atlas Air Worldwide’s current PE level puts it below its midpoint over the past five years.
Image Source: Zacks Investment Research
Further, the stock’s PE also compares favorably with its industry’s trailing twelve months PE ratio, which stands at 17.7. At the very least, this indicates that the stock is relatively undervalued right now, compared to its peers.
Image Source: Zacks Investment Research
We should also point out that Atlas Air Worldwide has a forward PE ratio (price relative to this year’s earnings) of just 4.9, so it is fair to say that a slightly more value-oriented path may be ahead for Atlas Air Worldwide stock in the near term too.
P/S Ratio
Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.
Right now, Atlas Air Worldwide has a P/S ratio of about 0.6. This is a lower than the S&P 500 average, which comes in at 5.1 right now. However, we can see in the chart below, this is slightly above the highs for this stock in particular over the past few years.
Image Source: Zacks Investment Research
If anything, this suggests some level of undervalued trading—at least compared to historical norms.
Broad Value Outlook
In aggregate, Atlas Air Worldwide currently has a Value Score of A, putting it into the top 20% of all stocks we cover from this look. This makes Atlas Air Worldwide a solid choice for value investors, and some of its other key metrics make this pretty clear too.
For example, the P/CF ratio (another great indicator of value) comes in at 2.9, which is far better than the industry average of 7.6. Clearly, AAWW is a solid choice on the value front from multiple angles.
What About the Stock Overall?
Though Atlas Air Worldwide might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth Score of B and a Momentum Score of C. This gives AAWW a Zacks VGM score — or its overarching fundamental grade — of A. (You can read more about the Zacks Style Scores here >>)
Meanwhile, the company’s recent earnings estimates have been robust at best. The current quarter has seen two estimates go higher in the past sixty days compared to none lower, while the full year estimate has seen three up and none down in the same time period.
This has had a noticeable impact on the consensus estimate though as the current quarter consensus estimate has increased by 36% in the past two months, while the full year estimate has improved by 20.6%. You can see the consensus estimate trend and recent price action for the stock in the chart below:
Atlas Air Worldwide Holdings Price and Consensus
Atlas Air Worldwide Holdings price-consensus-chart | Atlas Air Worldwide Holdings Quote
This bullish trend is why the stock has a Zacks Rank #2 (Buy) and why we are expecting outperformance from the company in the near term.
Bottom Line
Atlas Air Worldwide is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. Boasting a solid industry rank (top 45%) and a top Zacks Rank, the company deserves attention right now. However, over the past two years, the Zacks Transportation - Air Freight and Cargo industry has underperformed the broader market, as you can see below:
Image Source: Zacks Investment Research
Nonetheless, it might pay for value investors to delve deeper into the company’s prospects, as fundamentals indicate that this stock could be a compelling pick.