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Should Value Investors Buy SkyWest (SKYW) Stock?

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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.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One company to watch right now is SkyWest (SKYW - Free Report) . SKYW is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value.

Another notable valuation metric for SKYW is its P/B ratio of 1.55. 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 2.55. SKYW's P/B has been as high as 1.83 and as low as 1.15, with a median of 1.51, over the past year.

Finally, investors will want to recognize that SKYW has a P/CF ratio of 5.03. 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. SKYW's P/CF compares to its industry's average P/CF of 6.66. SKYW's P/CF has been as high as 5.10 and as low as 2.85, with a median of 4.07, 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.


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