While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. 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 Copa Holdings (CPA). CPA is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 7.75. This compares to its industry's average Forward P/E of 8.68. Over the past year, CPA's Forward P/E has been as high as 12.31 and as low as 7.16, with a median of 8.82.
Investors should also recognize that CPA has a P/B ratio of 2.46. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 3.81. Within the past 52 weeks, CPA's P/B has been as high as 2.67 and as low as 1.81, with a median of 2.33.
Finally, investors will want to recognize that CPA has a P/CF ratio of 5.98. 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. CPA's current P/CF looks attractive when compared to its industry's average P/CF of 10.96. CPA's P/CF has been as high as 7.52 and as low as 4.29, with a median of 5.71, all within the past year.
If you're looking for another solid Transportation - Airline value stock, take a look at United Airlines (UAL). UAL is a # 1 (Strong Buy) stock with a Value score of A.
Shares of United Airlines currently holds a Forward P/E ratio of 4.68, and its PEG ratio is 0.10. In comparison, its industry sports average P/E and PEG ratios of 8.68 and 0.27.
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