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 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 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 holds a P/E ratio of 5.75, while its industry has an average P/E of 8.81. AAL's Forward P/E has been as high as 11.53 and as low as 5.34, with a median of 7.36, all within the past year.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's 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 0.33. This compares to its industry's average P/S of 0.65.
Finally, we should also recognize that AAL has a P/CF ratio of 4.85. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 5.44. AAL's P/CF has been as high as 7.33 and as low as 4.50, with a median of 5.59, all within the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that American Airlines is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, AAL 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 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 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 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 holds a P/E ratio of 5.75, while its industry has an average P/E of 8.81. AAL's Forward P/E has been as high as 11.53 and as low as 5.34, with a median of 7.36, all within the past year.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's 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 0.33. This compares to its industry's average P/S of 0.65.
Finally, we should also recognize that AAL has a P/CF ratio of 4.85. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 5.44. AAL's P/CF has been as high as 7.33 and as low as 4.50, with a median of 5.59, all within the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that American Airlines is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, AAL feels like a great value stock at the moment.