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Are Investors Undervaluing American Airlines (AAL) Right Now?
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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 company value investors might notice is American Airlines (AAL - Free Report) . AAL is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 7.64. This compares to its industry's average Forward P/E of 10.35. AAL's Forward P/E has been as high as 9.60 and as low as 4.34, with a median of 5.61, all within the past year.
Investors should also note that AAL holds a PEG ratio of 0.14. 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. AAL's PEG compares to its industry's average PEG of 0.38. Within the past year, AAL's PEG has been as high as 0.14 and as low as 0.08, with a median of 0.10.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. AAL has a P/S ratio of 0.18. This compares to its industry's average P/S of 0.33.
Finally, investors should note that AAL has a P/CF ratio of 2.41. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 5.67. AAL's P/CF has been as high as 5.04 and as low as 1.83, with a median of 2.33, all within the past year.
Another great Transportation - Airline stock you could consider is Copa Holdings (CPA - Free Report) , which is a # 2 (Buy) stock with a Value Score of A.
Shares of Copa Holdings currently holds a Forward P/E ratio of 6.73, and its PEG ratio is 0.38. In comparison, its industry sports average P/E and PEG ratios of 10.35 and 0.38.
Over the past year, CPA's P/E has been as high as 9.22, as low as 5.32, with a median of 7.24; its PEG ratio has been as high as 0.39, as low as 0.27, with a median of 0.10 during the same time period.
Furthermore, Copa Holdings holds a P/B ratio of 2.01 and its industry's price-to-book ratio is 3.47. CPA's P/B has been as high as 3.04, as low as 1.55, with a median of 2.39 over the past 12 months.
These figures are just a handful of the metrics value investors tend to look at, but they help show that American Airlines and Copa Holdings are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, AAL and CPA feels like a great value stock at the moment.
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Are Investors Undervaluing American Airlines (AAL) Right Now?
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 company value investors might notice is American Airlines (AAL - Free Report) . AAL is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 7.64. This compares to its industry's average Forward P/E of 10.35. AAL's Forward P/E has been as high as 9.60 and as low as 4.34, with a median of 5.61, all within the past year.
Investors should also note that AAL holds a PEG ratio of 0.14. 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. AAL's PEG compares to its industry's average PEG of 0.38. Within the past year, AAL's PEG has been as high as 0.14 and as low as 0.08, with a median of 0.10.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. AAL has a P/S ratio of 0.18. This compares to its industry's average P/S of 0.33.
Finally, investors should note that AAL has a P/CF ratio of 2.41. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 5.67. AAL's P/CF has been as high as 5.04 and as low as 1.83, with a median of 2.33, all within the past year.
Another great Transportation - Airline stock you could consider is Copa Holdings (CPA - Free Report) , which is a # 2 (Buy) stock with a Value Score of A.
Shares of Copa Holdings currently holds a Forward P/E ratio of 6.73, and its PEG ratio is 0.38. In comparison, its industry sports average P/E and PEG ratios of 10.35 and 0.38.
Over the past year, CPA's P/E has been as high as 9.22, as low as 5.32, with a median of 7.24; its PEG ratio has been as high as 0.39, as low as 0.27, with a median of 0.10 during the same time period.
Furthermore, Copa Holdings holds a P/B ratio of 2.01 and its industry's price-to-book ratio is 3.47. CPA's P/B has been as high as 3.04, as low as 1.55, with a median of 2.39 over the past 12 months.
These figures are just a handful of the metrics value investors tend to look at, but they help show that American Airlines and Copa Holdings are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, AAL and CPA feels like a great value stock at the moment.