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Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put Hawaiian Holdings, Inc. (HA - Free Report) stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:
PE Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, Hawaiian Holdings has a trailing twelve months PE ratio of 9.60, as you can see in the chart below:
This level actually compares pretty favorably with the market at large, as the PE for the S&P 500 compares in at about 20.35. If we focus on the stock’s long-term PE trend, the current level puts Hawaiian Holdings’ current PE ratio below its midpoint over the past five years.
Further, the stock’s PE also compares favorably with the Zacks classified Transportation-Airline industry’s trailing twelve months PE ratio, which stands at 9.75. At the very least, this indicates that the stock is relatively undervalued right now, compared to its peers.
We should also point out that Hawaiian Holdings has a forward PE ratio (price relative to this year’s earnings) of just 10.48, compared to the industry average of 10.93, so while a more value-oriented path may not be ahead for Hawaiian Holdings stock in the near term, it is expected to remain undervalued compared to its peers.
P/S Ratio
Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.
Right now, Hawaiian Holdings has a P/S ratio of about 1.14. This is lower than the S&P 500 average, which comes in at 3.17 right now. Also, as we can see in the chart below, this is well below the highs for this stock in particular over the past few years.
Broad Value Outlook
In aggregate, Hawaiian Holdings currently has a Zacks Value Style Score of ‘A’, putting it into the top 20% of all stocks we cover from this look. This makes Hawaiian Holdings a solid choice for value investors.
What About the Stock Overall?
Though Hawaiian Holdings might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth grade of ‘C’ and a Momentum score of ‘D’. This gives HA a Zacks VGM score—or its overarching fundamental grade—of ‘B’. (You can read more about the Zacks Style Scores here >>)
Meanwhile, the company’s recent earnings estimates have been going up. The current quarter has seen three estimates go higher in the past sixty days compared to none lower, while the full year estimate has seen four up and two down in the same time period.
This has had just a large impact on the consensus estimate as the current quarter consensus estimate has risen by 20.3% in the past two months, while the full year estimate has inched up by 1.1%. You can see the consensus estimate trend and recent price action for the stock in the chart below:
Despite the positive trend the stock has just a Zacks Rank #3 (Hold) and why we are looking for in-line performance from the company in the near term.
Bottom Line
Hawaiian Holdings is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. Moreover, a strong industry rank (Top 22% compared to over 250 industries) further underlines the potential of the company overall. In fact, over the past three years, the Zacks Transportation-Airline industry has clearly outperformed the broader market, as you can see below:
However, a Zacks Rank #3 indicates analysts have some apprehensions about the stock in the immediate future. So, value investors might want to wait for estimates and analyst sentiment to turn around in this name first, but once that happens, this stock could be a compelling pick.
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Is Hawaiian Holdings (HA) a Good Value Pick?
Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put Hawaiian Holdings, Inc. (HA - Free Report) stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:
PE Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, Hawaiian Holdings has a trailing twelve months PE ratio of 9.60, as you can see in the chart below:
This level actually compares pretty favorably with the market at large, as the PE for the S&P 500 compares in at about 20.35. If we focus on the stock’s long-term PE trend, the current level puts Hawaiian Holdings’ current PE ratio below its midpoint over the past five years.
Further, the stock’s PE also compares favorably with the Zacks classified Transportation-Airline industry’s trailing twelve months PE ratio, which stands at 9.75. At the very least, this indicates that the stock is relatively undervalued right now, compared to its peers.
We should also point out that Hawaiian Holdings has a forward PE ratio (price relative to this year’s earnings) of just 10.48, compared to the industry average of 10.93, so while a more value-oriented path may not be ahead for Hawaiian Holdings stock in the near term, it is expected to remain undervalued compared to its peers.
P/S Ratio
Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.
Right now, Hawaiian Holdings has a P/S ratio of about 1.14. This is lower than the S&P 500 average, which comes in at 3.17 right now. Also, as we can see in the chart below, this is well below the highs for this stock in particular over the past few years.
Broad Value Outlook
In aggregate, Hawaiian Holdings currently has a Zacks Value Style Score of ‘A’, putting it into the top 20% of all stocks we cover from this look. This makes Hawaiian Holdings a solid choice for value investors.
What About the Stock Overall?
Though Hawaiian Holdings might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth grade of ‘C’ and a Momentum score of ‘D’. This gives HA a Zacks VGM score—or its overarching fundamental grade—of ‘B’. (You can read more about the Zacks Style Scores here >>)
Meanwhile, the company’s recent earnings estimates have been going up. The current quarter has seen three estimates go higher in the past sixty days compared to none lower, while the full year estimate has seen four up and two down in the same time period.
This has had just a large impact on the consensus estimate as the current quarter consensus estimate has risen by 20.3% in the past two months, while the full year estimate has inched up by 1.1%. You can see the consensus estimate trend and recent price action for the stock in the chart below:
Hawaiian Holdings, Inc. Price and Consensus
Hawaiian Holdings, Inc. Price and Consensus | Hawaiian Holdings, Inc. Quote
Despite the positive trend the stock has just a Zacks Rank #3 (Hold) and why we are looking for in-line performance from the company in the near term.
Bottom Line
Hawaiian Holdings is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. Moreover, a strong industry rank (Top 22% compared to over 250 industries) further underlines the potential of the company overall. In fact, over the past three years, the Zacks Transportation-Airline industry has clearly outperformed the broader market, as you can see below:
However, a Zacks Rank #3 indicates analysts have some apprehensions about the stock in the immediate future. So, value investors might want to wait for estimates and analyst sentiment to turn around in this name first, but once that happens, this stock could be a compelling pick.
A Full-Blown Technological Breakthrough in the Making
Zacks’ Aggressive Growth Strategist Brian Bolan explores autonomous cars in our latest Special Report, Driverless Cars: Your Roadmap to Mega-Profits Today. In addition to who will be selling them and how the auto industry will be impacted, Brian reveals 8 stocks with tremendous gain potential to feed off this phenomenon.Click to see the stocks right now >>