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 United Airlines (UAL) Right Now?
Read MoreHide Full Article
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.
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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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 company value investors might notice is United Airlines (UAL - Free Report) . UAL is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.
Investors will also notice that UAL has a PEG ratio of 0.43. 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. UAL's industry has an average PEG of 0.71 right now. Over the last 12 months, UAL's PEG has been as high as 0.68 and as low as 0.07, with a median of 0.45.
Another valuation metric that we should highlight is UAL's P/B ratio of 1.68. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. UAL's current P/B looks attractive when compared to its industry's average P/B of 3.42. Within the past 52 weeks, UAL's P/B has been as high as 2.45 and as low as 1.26, with a median of 1.60.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. UAL has a P/S ratio of 0.28. This compares to its industry's average P/S of 0.33.
Finally, investors will want to recognize that UAL has a P/CF ratio of 2.81. 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 10.06. Over the past year, UAL's P/CF has been as high as 3.62 and as low as 2.06, with a median of 2.73.
If you're looking for another solid Transportation - Airline value stock, take a look at Controladora Vuela Compania de Aviacion, B. de C.V. (VLRS - Free Report) . VLRS is a # 1 (Strong Buy) stock with a Value score of A.
Shares of Controladora Vuela Compania de Aviacion, B. de C.V. currently holds a Forward P/E ratio of 8.27, and its PEG ratio is -2.17. In comparison, its industry sports average P/E and PEG ratios of 15.42 and 0.71.
VLRS's Forward P/E has been as high as 6,243.17 and as low as -73,021.84, with a median of 10.77. During the same time period, its PEG ratio has been as high as 644.96, as low as -7,543.58, with a median of 0.96.
Controladora Vuela Compania de Aviacion, B. de C.V. also has a P/B ratio of 2.61 compared to its industry's price-to-book ratio of 3.42. Over the past year, its P/B ratio has been as high as 7.13, as low as 2.61, with a median of 3.97.
These figures are just a handful of the metrics value investors tend to look at, but they help show that United Airlines and Controladora Vuela Compania de Aviacion, B. de C.V. are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, UAL and VLRS feels like a great 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 United Airlines (UAL) 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.
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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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 company value investors might notice is United Airlines (UAL - Free Report) . UAL is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.
Investors will also notice that UAL has a PEG ratio of 0.43. 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. UAL's industry has an average PEG of 0.71 right now. Over the last 12 months, UAL's PEG has been as high as 0.68 and as low as 0.07, with a median of 0.45.
Another valuation metric that we should highlight is UAL's P/B ratio of 1.68. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. UAL's current P/B looks attractive when compared to its industry's average P/B of 3.42. Within the past 52 weeks, UAL's P/B has been as high as 2.45 and as low as 1.26, with a median of 1.60.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. UAL has a P/S ratio of 0.28. This compares to its industry's average P/S of 0.33.
Finally, investors will want to recognize that UAL has a P/CF ratio of 2.81. 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 10.06. Over the past year, UAL's P/CF has been as high as 3.62 and as low as 2.06, with a median of 2.73.
If you're looking for another solid Transportation - Airline value stock, take a look at Controladora Vuela Compania de Aviacion, B. de C.V. (VLRS - Free Report) . VLRS is a # 1 (Strong Buy) stock with a Value score of A.
Shares of Controladora Vuela Compania de Aviacion, B. de C.V. currently holds a Forward P/E ratio of 8.27, and its PEG ratio is -2.17. In comparison, its industry sports average P/E and PEG ratios of 15.42 and 0.71.
VLRS's Forward P/E has been as high as 6,243.17 and as low as -73,021.84, with a median of 10.77. During the same time period, its PEG ratio has been as high as 644.96, as low as -7,543.58, with a median of 0.96.
Controladora Vuela Compania de Aviacion, B. de C.V. also has a P/B ratio of 2.61 compared to its industry's price-to-book ratio of 3.42. Over the past year, its P/B ratio has been as high as 7.13, as low as 2.61, with a median of 3.97.
These figures are just a handful of the metrics value investors tend to look at, but they help show that United Airlines and Controladora Vuela Compania de Aviacion, B. de C.V. are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, UAL and VLRS feels like a great value stock at the moment.