We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Are Investors Undervaluing American Airlines (AAL) Right Now?
Read MoreHide Full Article
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 stock to keep an eye on is American Airlines (AAL - Free Report) . AAL is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 4.89 right now. For comparison, its industry sports an average P/E of 9.04. AAL's Forward P/E has been as high as 9,493.45 and as low as -3,032.07, with a median of 11.59, all within the past year.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. 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 0.18. This compares to its industry's average P/S of 0.41.
Finally, investors should note that AAL has a P/CF ratio of 3.87. 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 10.88. AAL's P/CF has been as high as 26.90 and as low as -305.42, with a median of 11.72, all within the past year.
Investors could also keep in mind Delta Air Lines (DAL - Free Report) , an Transportation - Airline stock with a Zacks Rank of # 2 (Buy) and Value grade of A.
Shares of Delta Air Lines currently holds a Forward P/E ratio of 6.04, and its PEG ratio is 0.18. In comparison, its industry sports average P/E and PEG ratios of 9.04 and 0.29.
DAL's price-to-earnings ratio has been as high as 17.05 and as low as 5.73, with a median of 7.20, while its PEG ratio has been as high as 0.21 and as low as 0.17, with a median of 0.20, all within the past year.
Delta Air Lines also has a P/B ratio of 3.55 compared to its industry's price-to-book ratio of 3.78. Over the past year, its P/B ratio has been as high as 9.59, as low as 3.08, with a median of 4.82.
These are only a few of the key metrics included in American Airlines and Delta Air Lines 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 DAL look like an impressive value stock at the moment.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Are Investors Undervaluing American Airlines (AAL) Right Now?
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 stock to keep an eye on is American Airlines (AAL - Free Report) . AAL is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 4.89 right now. For comparison, its industry sports an average P/E of 9.04. AAL's Forward P/E has been as high as 9,493.45 and as low as -3,032.07, with a median of 11.59, all within the past year.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. 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 0.18. This compares to its industry's average P/S of 0.41.
Finally, investors should note that AAL has a P/CF ratio of 3.87. 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 10.88. AAL's P/CF has been as high as 26.90 and as low as -305.42, with a median of 11.72, all within the past year.
Investors could also keep in mind Delta Air Lines (DAL - Free Report) , an Transportation - Airline stock with a Zacks Rank of # 2 (Buy) and Value grade of A.
Shares of Delta Air Lines currently holds a Forward P/E ratio of 6.04, and its PEG ratio is 0.18. In comparison, its industry sports average P/E and PEG ratios of 9.04 and 0.29.
DAL's price-to-earnings ratio has been as high as 17.05 and as low as 5.73, with a median of 7.20, while its PEG ratio has been as high as 0.21 and as low as 0.17, with a median of 0.20, all within the past year.
Delta Air Lines also has a P/B ratio of 3.55 compared to its industry's price-to-book ratio of 3.78. Over the past year, its P/B ratio has been as high as 9.59, as low as 3.08, with a median of 4.82.
These are only a few of the key metrics included in American Airlines and Delta Air Lines 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 DAL look like an impressive value stock at the moment.