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Are Investors Undervaluing Air Transport Services (ATSG) Right Now?

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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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 stock to keep an eye on is Air Transport Services (ATSG - Free Report) . ATSG is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.

Another notable valuation metric for ATSG is its P/B ratio of 3.79. 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 11.20. Over the past 12 months, ATSG's P/B has been as high as 3.91 and as low as 2.20, with a median of 3.32.

Finally, investors should note that ATSG has a P/CF ratio of 4.51. 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. ATSG's P/CF compares to its industry's average P/CF of 13.95. Within the past 12 months, ATSG's P/CF has been as high as 5.40 and as low as 3.27, with a median of 4.45.

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


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