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Is Air Transport Services (ATSG) Stock Undervalued 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.

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.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One company to watch right now is Air Transport Services (ATSG - Free Report) . ATSG 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 11.95 right now. For comparison, its industry sports an average P/E of 14.06. Over the past year, ATSG's Forward P/E has been as high as 17.89 and as low as 8.64, with a median of 15.02.

Finally, investors will want to recognize that ATSG has a P/CF ratio of 3.21. 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 stock's P/CF looks attractive against its industry's average P/CF of 12.49. Over the past 52 weeks, ATSG's P/CF has been as high as 4.99 and as low as 2.33, with a median of 4.21.

Value investors will likely look at more than just these metrics, but the above data helps show that Air Transport Services is likely undervalued currently. And when considering the strength of its earnings outlook, ATSG sticks out at as one of the market's strongest value stocks.


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