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Are Investors Undervaluing United Airlines (UAL) Right Now?
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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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 value investors might notice is United Airlines (UAL - Free Report) . UAL is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 7.47, which compares to its industry's average of 15.80. Over the past year, UAL's Forward P/E has been as high as 2,764.99 and as low as -3.24, with a median of 18.72.
Investors should also recognize that UAL has a P/B ratio of 2.96. The P/B ratio is used to compare a stock's market value with 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 4.36. Over the past year, UAL's P/B has been as high as 4.68 and as low as 2.01, with a median of 2.99.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. UAL has a P/S ratio of 0.34. This compares to its industry's average P/S of 0.47.
Finally, our model also underscores that UAL has a P/CF ratio of 8.45. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. UAL's current P/CF looks attractive when compared to its industry's average P/CF of 19.32. Over the past 52 weeks, UAL's P/CF has been as high as 33.67 and as low as -21.15, with a median of 10.53.
If you're looking for another solid Transportation - Airline value stock, take a look at Controladora Vuela Compania de Aviacion, B. de C.V (VLRS - Free Report) . VLRS is a # 2 (Buy) stock with a Value score of A.
Controladora Vuela Compania de Aviacion, B. de C.V sports a P/B ratio of 5.40 as well; this compares to its industry's price-to-book ratio of 4.36. In the past 52 weeks, VLRS's P/B has been as high as 10.67, as low as 3.69, with a median of 5.59.
Value investors will likely look at more than just these metrics, but the above data helps show that United Airlines and Controladora Vuela Compania de Aviacion, B. de C.V are likely undervalued currently. And when considering the strength of its earnings outlook, UAL and VLRS sticks out as one of the market's strongest value stocks.
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Are Investors Undervaluing United Airlines (UAL) Right Now?
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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 value investors might notice is United Airlines (UAL - Free Report) . UAL is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 7.47, which compares to its industry's average of 15.80. Over the past year, UAL's Forward P/E has been as high as 2,764.99 and as low as -3.24, with a median of 18.72.
Investors should also recognize that UAL has a P/B ratio of 2.96. The P/B ratio is used to compare a stock's market value with 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 4.36. Over the past year, UAL's P/B has been as high as 4.68 and as low as 2.01, with a median of 2.99.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. UAL has a P/S ratio of 0.34. This compares to its industry's average P/S of 0.47.
Finally, our model also underscores that UAL has a P/CF ratio of 8.45. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. UAL's current P/CF looks attractive when compared to its industry's average P/CF of 19.32. Over the past 52 weeks, UAL's P/CF has been as high as 33.67 and as low as -21.15, with a median of 10.53.
If you're looking for another solid Transportation - Airline value stock, take a look at Controladora Vuela Compania de Aviacion, B. de C.V (VLRS - Free Report) . VLRS is a # 2 (Buy) stock with a Value score of A.
Controladora Vuela Compania de Aviacion, B. de C.V sports a P/B ratio of 5.40 as well; this compares to its industry's price-to-book ratio of 4.36. In the past 52 weeks, VLRS's P/B has been as high as 10.67, as low as 3.69, with a median of 5.59.
Value investors will likely look at more than just these metrics, but the above data helps show that United Airlines and Controladora Vuela Compania de Aviacion, B. de C.V are likely undervalued currently. And when considering the strength of its earnings outlook, UAL and VLRS sticks out as one of the market's strongest value stocks.