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Should Value Investors Buy Aircastle (AYR) Stock?

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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 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.

Aircastle (AYR - Free Report) is a stock many investors are watching right now. AYR 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 8.83, which compares to its industry's average of 11.20. AYR's Forward P/E has been as high as 10.10 and as low as 5.86, with a median of 8.59, all within the past year.

AYR is also sporting a PEG ratio of 0.80. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. AYR's PEG compares to its industry's average PEG of 1.12. Within the past year, AYR's PEG has been as high as 1.01 and as low as 0.59, with a median of 0.86.

We should also highlight that AYR has a P/B ratio of 0.77. 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 attractive against its industry's average P/B of 1.48. Over the past year, AYR's P/B has been as high as 0.93 and as low as 0.63, with a median of 0.81.

Finally, our model also underscores that AYR has a P/CF ratio of 2.64. 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. AYR's current P/CF looks attractive when compared to its industry's average P/CF of 5.66. Over the past 52 weeks, AYR's P/CF has been as high as 3.71 and as low as 2.23, with a median of 2.97.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Aircastle is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, AYR feels like a great value stock at the moment.


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