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Air Transport Services Group, Inc (ATSG) - free report >>
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Air Transport Services Group, Inc (ATSG) - free report >>
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Why You Should Retain Air Transport Services (ATSG) Stock Now
Air Transport Services Group, Inc. (ATSG - Free Report) is benefiting from investor-friendly steps and fleet expansion. However, low liquidity is worrisome.
Factors Favoring ATSG
We are impressed by ATSG's efforts to reward its shareholders through buybacks. In November 2022, its board of directors approved a new share repurchase authorization of $150 million shares, offsetting its previously exhausted share buybacks. ATSG repurchased 5.4 million shares in the third quarter of 2023.
Its fleet expansion is encouraging. Air Transport Services’ total fleet in service included 128 aircraft (18 passenger and 110 freighter) in service at 2022-end compared with 117 at 2021 end. ATSG aims to end 2023 with a fleet size of 134 (18 passenger planes and 116 freighters).
Key Risks
The company's liquidity position is a concern. At the end of the third quarter of 2023, ATSG’s current ratio (a measure of liquidity) was 0.92. A current ratio of less than 1 is not desirable as it implies that it has insufficient capital to pay off its short-term debt. This is because the proportion of liabilities for the company is larger compared to current assets.
Zacks Rank
ATSG currently carries Zacks Rank #3 (Hold).
Key Picks
Some better-ranked stocks for investors interested in the Zacks Transportation sector are Air Canada (ACDVF - Free Report) and SkyWest (SKYW - Free Report) .
Air Canada currently sports a Zacks Rank #1 (Strong Buy). An uptick in passenger traffic is aiding ACDVF. Recently, management announced plans to launch a new year-round route between Montreal and Madrid. You can see the complete list of today’s Zacks #1 Rank stocks here.
The service will commence in May of the following year as part of its expanded international summer 2024 flying schedule to cater to increased demand. The Zacks Consensus Estimate for current-year earnings has jumped 32.6% in the past 60 days.
SkyWest currently carries a Zacks Rank #2 (Buy). SKYW's fleet modernization efforts are commendable. Initiatives to reward its shareholders also bode well. The Zacks Consensus Estimate for current-quarter earnings has surged 83.3% in the past 60 days.