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Are Investors Undervaluing Controladora Vuela Compania de Aviacion, B. de C.V. (VLRS) Right Now?

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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One stock to keep an eye on is Controladora Vuela Compania de Aviacion, B. de C.V. (VLRS - Free Report) . VLRS is currently sporting a Zacks Rank #2 (Buy), as well as a Value grade of A.

Investors should also recognize that VLRS has a P/B ratio of 3.1. Investors use the P/B ratio to look at a stock's market value versus 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 3.56. Within the past 52 weeks, VLRS's P/B has been as high as 3.10 and as low as 1.33, with a median of 2.50.

Value investors also use the P/S ratio. The P/S ratio is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. VLRS has a P/S ratio of 0.26. This compares to its industry's average P/S of 0.56.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Controladora Vuela Compania de Aviacion, B. de C.V. is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, VLRS feels like a great value stock at the moment.


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