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Should Value Investors Buy United Airlines (UAL) Stock?
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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
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.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One stock to keep an eye on is United Airlines (UAL - Free Report) . UAL is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 6.30. This compares to its industry's average Forward P/E of 11.12. Over the past 52 weeks, UAL's Forward P/E has been as high as 2,764.99 and as low as 5.79, with a median of 9.32.
Another valuation metric that we should highlight is UAL's P/B ratio of 2.36. The P/B ratio pits a stock's market value against 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 4.63. Over the past 12 months, UAL's P/B has been as high as 4.68 and as low as 1.76, with a median of 2.96.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. UAL has a P/S ratio of 0.36. This compares to its industry's average P/S of 0.52.
Investors could also keep in mind Controladora Vuela Compania de Aviacion, B. de C.V (VLRS - Free Report) , an Transportation - Airline stock with a Zacks Rank of # 1 (Strong Buy) and Value grade of A.
Furthermore, Controladora Vuela Compania de Aviacion, B. de C.V holds a P/B ratio of 5.99 and its industry's price-to-book ratio is 4.63. VLRS's P/B has been as high as 8.19, as low as 3.69, with a median of 5.35 over the past 12 months.
These are only a few of the key metrics included in United Airlines and Controladora Vuela Compania de Aviacion, B. de C.V strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, UAL and VLRS look like an impressive value stock at the moment.
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Should Value Investors Buy United Airlines (UAL) Stock?
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
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.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One stock to keep an eye on is United Airlines (UAL - Free Report) . UAL is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 6.30. This compares to its industry's average Forward P/E of 11.12. Over the past 52 weeks, UAL's Forward P/E has been as high as 2,764.99 and as low as 5.79, with a median of 9.32.
Another valuation metric that we should highlight is UAL's P/B ratio of 2.36. The P/B ratio pits a stock's market value against 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 4.63. Over the past 12 months, UAL's P/B has been as high as 4.68 and as low as 1.76, with a median of 2.96.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. UAL has a P/S ratio of 0.36. This compares to its industry's average P/S of 0.52.
Investors could also keep in mind Controladora Vuela Compania de Aviacion, B. de C.V (VLRS - Free Report) , an Transportation - Airline stock with a Zacks Rank of # 1 (Strong Buy) and Value grade of A.
Furthermore, Controladora Vuela Compania de Aviacion, B. de C.V holds a P/B ratio of 5.99 and its industry's price-to-book ratio is 4.63. VLRS's P/B has been as high as 8.19, as low as 3.69, with a median of 5.35 over the past 12 months.
These are only a few of the key metrics included in United Airlines and Controladora Vuela Compania de Aviacion, B. de C.V strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, UAL and VLRS look like an impressive value stock at the moment.