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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. 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 Delta Air Lines (DAL - Free Report) . DAL is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 8.41, while its industry has an average P/E of 10. Over the past 52 weeks, DAL's Forward P/E has been as high as 8.98 and as low as 7.16, with a median of 8.02.
Investors should also note that DAL holds a PEG ratio of 0.70. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. DAL's industry has an average PEG of 0.71 right now. Over the last 12 months, DAL's PEG has been as high as 0.78 and as low as 0.43, with a median of 0.59.
Another valuation metric that we should highlight is DAL's P/B ratio of 2.53. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. DAL's current P/B looks attractive when compared to its industry's average P/B of 2.63. Over the past 12 months, DAL's P/B has been as high as 2.96 and as low as 2.27, with a median of 2.59.
Finally, investors will want to recognize that DAL has a P/CF ratio of 5.45. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 5.88. Within the past 12 months, DAL's P/CF has been as high as 6.08 and as low as 4.88, with a median of 5.53.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Delta Air Lines is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, DAL feels like a great value stock at the moment.