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Are Investors Undervaluing American Airlines (AAL) Right Now?
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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.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company value investors might notice is American Airlines (AAL - Free Report) . AAL is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 5.50, which compares to its industry's average of 8.77. AAL's Forward P/E has been as high as 11.53 and as low as 5.34, with a median of 7.30, all within the past year.
We also note that AAL holds a PEG ratio of 0.72. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. AAL's industry currently sports an average PEG of 0.73. Within the past year, AAL's PEG has been as high as 5.31 and as low as 0.38, with a median of 0.68.
Value investors also use the P/S ratio. The P/S ratio is 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. AAL has a P/S ratio of 0.33. This compares to its industry's average P/S of 0.7.
Finally, investors should note that AAL has a P/CF ratio of 4.80. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. AAL's P/CF compares to its industry's average P/CF of 5.56. Within the past 12 months, AAL's P/CF has been as high as 7.33 and as low as 4.50, with a median of 5.56.
These are only a few of the key metrics included in American Airlines's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, AAL looks like an impressive value stock at the moment.
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Are Investors Undervaluing American Airlines (AAL) Right Now?
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.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company value investors might notice is American Airlines (AAL - Free Report) . AAL is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 5.50, which compares to its industry's average of 8.77. AAL's Forward P/E has been as high as 11.53 and as low as 5.34, with a median of 7.30, all within the past year.
We also note that AAL holds a PEG ratio of 0.72. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. AAL's industry currently sports an average PEG of 0.73. Within the past year, AAL's PEG has been as high as 5.31 and as low as 0.38, with a median of 0.68.
Value investors also use the P/S ratio. The P/S ratio is 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. AAL has a P/S ratio of 0.33. This compares to its industry's average P/S of 0.7.
Finally, investors should note that AAL has a P/CF ratio of 4.80. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. AAL's P/CF compares to its industry's average P/CF of 5.56. Within the past 12 months, AAL's P/CF has been as high as 7.33 and as low as 4.50, with a median of 5.56.
These are only a few of the key metrics included in American Airlines's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, AAL looks like an impressive value stock at the moment.