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Are Investors Undervaluing Air Lease (AL) 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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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.

Air Lease (AL - Free Report) is a stock many investors are watching right now. AL is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 6.23 right now. For comparison, its industry sports an average P/E of 11.30. Over the past 52 weeks, AL's Forward P/E has been as high as 10.07 and as low as 4.82, with a median of 8.11.

We also note that AL holds a PEG ratio of 0.73. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. AL's PEG compares to its industry's average PEG of 1.10. AL's PEG has been as high as 1.65 and as low as 0.57, with a median of 0.94, all within the past year.

Another valuation metric that we should highlight is AL's P/B ratio of 0.89. The P/B ratio pits a stock's market value against 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 1.33. Within the past 52 weeks, AL's P/B has been as high as 1.15 and as low as 0.67, with a median of 1.04.

Finally, we should also recognize that AL has a P/CF ratio of 2.96. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 4.27. Within the past 12 months, AL's P/CF has been as high as 3.99 and as low as 2.23, with a median of 3.55.

These are just a handful of the figures considered in Air Lease's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that AL is an impressive value stock right now.


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