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, 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 use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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.
LATAM Airlines Group (LTM – Free Report) is a stock many investors are watching right now. LTM is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock holds a P/E ratio of 7.09, while its industry has an average P/E of 16.38. Over the past 52 weeks, LTM’s Forward P/E has been as high as 9.31 and as low as 7.06, with a median of 8.04.
We also note that LTM holds a PEG ratio of 0.50. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock’s expected earnings growth rate. LTM’s PEG compares to its industry’s average PEG of 0.82. Over the past 52 weeks, LTM’s PEG has been as high as 0.64 and as low as 0.50, with a median of 0.55.
United Airlines (UAL – Free Report) may be another strong Transportation – Airline stock to add to your shortlist. UAL is a # 2 (Buy) stock with a Value grade of A.
Shares of United Airlines are currently trading at a forward earnings multiple of 8.61 and a PEG ratio of 0.96 compared to its industry’s P/E and PEG ratios of 16.38 and 0.82, respectively.
Over the last 12 months, UAL’s P/E has been as high as 8.85, as low as 3.63, with a median of 4.62, and its PEG ratio has been as high as 1.13, as low as 0.08, with a median of 0.58.
United Airlines also has a P/B ratio of 2.90 compared to its industry’s price-to-book ratio of 4.75. Over the past year, its P/B ratio has been as high as 2.95, as low as 1.18, with a median of 1.61.
These are only a few of the key metrics included in LATAM Airlines Group and United Airlines strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, LTM and UAL look like an impressive value stock at the moment.
Financial Market Newsflash
No financial news published today. Check back later.
