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 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 to watch right now is SkyWest (SKYW - Free Report) . SKYW 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 10.29, which compares to its industry's average of 10.42. Over the past year, SKYW's Forward P/E has been as high as 15.97 and as low as 8.90, with a median of 12.01.
We should also highlight that SKYW has a P/B ratio of 1.56. 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 company's current P/B looks solid when compared to its industry's average P/B of 2.76. Within the past 52 weeks, SKYW's P/B has been as high as 1.91 and as low as 1.32, with a median of 1.65.
Finally, our model also underscores that SKYW has a P/CF ratio of 3.72. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 5.77. SKYW's P/CF has been as high as 18.84 and as low as 3.13, with a median of 4.08, all within the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that SkyWest is likely undervalued currently. And when considering the strength of its earnings outlook, SKYW sticks out at as one of the market's strongest value stocks.