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.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company to watch right now is Allegiant (ALGT). ALGT is currently sporting a Zacks Rank #1 (Strong Buy), as well as an A grade for Value.
We also note that ALGT holds a PEG ratio of 0.27. 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. ALGT's PEG compares to its industry's average PEG of 0.45. ALGT's PEG has been as high as 5.12 and as low as 0.10, with a median of 0.29, all within the past year.
Another valuation metric that we should highlight is ALGT's P/B ratio of 1.06. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 3.18. Over the past year, ALGT's P/B has been as high as 1.77 and as low as 0.59, with a median of 0.95.
Value investors will likely look at more than just these metrics, but the above data helps show that Allegiant is likely undervalued currently. And when considering the strength of its earnings outlook, ALGT sticks out as one of the market's strongest value stocks.
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Allegiant Travel Company (ALGT): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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