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 use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 company to watch right now is LATAM Airlines Group (LTM). LTM 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 8.88, which compares to its industry's average of 9.51. Over the past 52 weeks, LTM's Forward P/E has been as high as 9.75 and as low as 6.73, with a median of 8.47.
We also note that LTM holds a PEG ratio of 0.40. 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. LTM's industry currently sports an average PEG of 0.49. Within the past year, LTM's PEG has been as high as 0.85 and as low as 0.37, with a median of 0.57.
Value investors will likely look at more than just these metrics, but the above data helps show that LATAM Airlines Group is likely undervalued currently. And when considering the strength of its earnings outlook, LTM sticks out as one of the market's strongest value stocks.
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LATAM Airlines Group S.A. (LTM): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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