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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of 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.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One stock to keep an eye on is Japan Airlines (JAPSY). JAPSY is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 9.66, which compares to its industry's average of 12.30. Over the past year, JAPSY's Forward P/E has been as high as 10.92 and as low as 8.07, with a median of 9.52.
Investors should also recognize that JAPSY has a P/B ratio of 1.39. 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 stock's P/B looks attractive against its industry's average P/B of 3.83. Over the past year, JAPSY's P/B has been as high as 1.41 and as low as 1.01, with a median of 1.16.
Finally, our model also underscores that JAPSY has a P/CF ratio of 5.08. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 7.99. JAPSY's P/CF has been as high as 5.24 and as low as 3.89, with a median of 4.56, all within the past year.
If you're looking for another solid Transportation - Airline value stock, take a look at LATAM Airlines Group (LTM). LTM is a Zacks Rank of #1 (Strong Buy) stock with a Value score of A.
Shares of LATAM Airlines Group currently hold a Forward P/E ratio of 9.60, and its PEG ratio is 0.44. In comparison, its industry sports average P/E and PEG ratios of 12.30 and 0.72.
Over the past year, LTM's P/E has been as high as 9.60, as low as 6.73, with a median of 8.44; its PEG ratio has been as high as 0.85, as low as 0.37, with a median of 0.58 during the same time period.
LATAM Airlines Group also has a P/B ratio of 16.87 compared to its industry's price-to-book ratio of 3.83. Over the past year, its P/B ratio has been as high as 16.87, as low as 8.79, with a median of 12.18.
These are only a few of the key metrics included in Japan Airlines and LATAM Airlines Group strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, JAPSY and LTM look like an impressive value stock at the moment.
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Japan Airlines Ltd (JAPSY): Free Stock Analysis Report LATAM Airlines Group S.A. (LTM): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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