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Should Value Investors Buy American Airlines (AAL) Stock?
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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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One stock to keep an eye on is American Airlines (AAL - Free Report) . AAL is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 8.82 right now. For comparison, its industry sports an average P/E of 12.59. Over the past year, AAL's Forward P/E has been as high as 9,493.45 and as low as -3,032.07, with a median of 11.71.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. AAL has a P/S ratio of 0.23. This compares to its industry's average P/S of 0.52.
Finally, investors will want to recognize that AAL has a P/CF ratio of 16.01. 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. AAL's P/CF compares to its industry's average P/CF of 24.30. Over the past year, AAL's P/CF has been as high as 35.74 and as low as -305.42, with a median of 14.26.
Another great Transportation - Airline stock you could consider is United Airlines (UAL - Free Report) , which is a # 2 (Buy) stock with a Value Score of A.
Furthermore, United Airlines holds a P/B ratio of 3.23 and its industry's price-to-book ratio is 4.81. UAL's P/B has been as high as 4.68, as low as 2.01, with a median of 3 over the past 12 months.
These are only a few of the key metrics included in American Airlines and United Airlines strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, AAL and UAL look like an impressive value stock at the moment.
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Should Value Investors Buy American Airlines (AAL) Stock?
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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One stock to keep an eye on is American Airlines (AAL - Free Report) . AAL is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 8.82 right now. For comparison, its industry sports an average P/E of 12.59. Over the past year, AAL's Forward P/E has been as high as 9,493.45 and as low as -3,032.07, with a median of 11.71.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. AAL has a P/S ratio of 0.23. This compares to its industry's average P/S of 0.52.
Finally, investors will want to recognize that AAL has a P/CF ratio of 16.01. 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. AAL's P/CF compares to its industry's average P/CF of 24.30. Over the past year, AAL's P/CF has been as high as 35.74 and as low as -305.42, with a median of 14.26.
Another great Transportation - Airline stock you could consider is United Airlines (UAL - Free Report) , which is a # 2 (Buy) stock with a Value Score of A.
Furthermore, United Airlines holds a P/B ratio of 3.23 and its industry's price-to-book ratio is 4.81. UAL's P/B has been as high as 4.68, as low as 2.01, with a median of 3 over the past 12 months.
These are only a few of the key metrics included in American Airlines and United Airlines strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, AAL and UAL look like an impressive value stock at the moment.